to zero, and the unique component of discretionary accruals proxy is due to the com-
mon measure error induced by performance:
MDAP
m
event firm,t
DAP
m
event firm,t
DAP
m
control firm,t
MDAP
m
event firm,t
冢
DA
event firm,t
η
m
event firm,t
冣
冢
DA
control firm,t
η
m
control firm,t
冣
(7.16)
MDAP
m
event firm,t
(DA
event firm,t
(
η
m
event firm,t
η
m
control firm,t
)⬵DA
event firm,t
where MDAP
m
it
is the performance-matched discretionary accruals proxy for firm i in
year testimated using the model m; DAP
m
it
is the discretionary accruals proxy for the
firm iin year testimated using the model m; DA
it
is the discretionary accrual for the firm
i in year t; and
η
m
it
is the measure error ...
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