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Some prior studies try to resolve the anomalous negative price-earnings relation by investigating whether investors price temporary losses and persistent losses differently. Some other prior studies examine whether this anomaly can be explained by the inclusion of value drivers into the valuation model. This study partitions sample firms by loss type (temporary losses and persistent losses) and simultaneously includes value drivers in the valuation model to investigate the infamous anomaly. Major findings that are different from prior studies are: (1) only persistent-loss firms have negative price-earnings relation; (2) the reduction of the negative price-earnings relation when research and development expenditure driver is included in the valuation model is significantly less than the reduction after the other four additional value drivers (capital expenditures, cash position, capital increase, and bond issuance) are included in the valuation model; (3) for persistent loss firms, research and development, capital expenditures, cash position, and capital increase are significant value drivers and for temporary loss firms, research and development and cash position drivers are significant value drivers; and (4) firm size and industry type (electronic industry and non-electronic industries) can also affect the price-earnings relation. [ABSTRACT FROM AUTHOR]