Using SMVAM as a Linear Approximation to a Nonlinear Function: A Note
A study contending that the linear statistical market-value accounting model (SMVAM) is a reasonable approximation of the relationship between market and book equity for firms with positive balance sheets, but that the linear approximation is inadequate when the data sample includes firms whose balance sheets show a low or negative liquidation value.
Suggested citation: Demirguc-Kunt, Asli, and James Thomson, 1988. “Using SMVAM as a Linear Approximation to a Nonlinear Function: A Note,” Federal Reserve Bank of Cleveland, Working Paper no. 88-10.