scholarly journals The Impact of the Disclosed R & D Expenditure on the Value Relevance of the Accounting Information: Evidence from Greek Listed Firms

Mathematics ◽  
2020 ◽  
Vol 8 (5) ◽  
pp. 730 ◽  
Author(s):  
Petros Kalantonis ◽  
Sotiria Schoina ◽  
Spyros Missiakoulis ◽  
Constantin Zopounidis
Keyword(s):  
Stock Prices ◽  
Value Relevance ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Empirical Studies ◽  
Accounting Information ◽  
Listed Firms ◽  
Prior Literature ◽  
Athens Stock Exchange ◽  
The Impact

Although many empirical studies have focused on R & D performance models for markets globally, the available financial information for R & D expenditure is limited. In other words, can we assume that the reported accounting information for R & D investment is adequate and valuable? This study empirically investigates the effect of R & D reported information on the value relevance of the accounting information of firms’ financial statements. Specifically, using Ohlson’s equation, it is examined whether changes in stock prices are explained better when R & D factors are included in models, in conjunction with changes in book value and abnormal earnings. We focus on listed firms on the Athens Stock Exchange in order to explore whether R & D expenses are value relevant, in a market which has been affected for a long period by the global economic crisis of 2007. In our findings, we observe that the reported R & D expenses do not have any significant influence on the investors’ choices, in contrast to expectations based on the prior literature. Moreover, the panel data analysis employed in the paper overcomes common methodological problems (such as autocorrelation, multicollinearity, and heteroscedasticity) and allows the estimation of unbiased and efficient estimators.

scholarly journals Post-Earnings Announcement Drift in Greece

2015 ◽  
Vol 18 (03) ◽  
pp. 1550019 ◽  
Author(s):  
William Forbes ◽  
George Giannopoulos
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Stock Exchange ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Earnings Announcement ◽  
Financial Reporting Standards ◽  
Post Earnings Announcement Drift ◽  
Athens Stock Exchange ◽  
The Impact

This paper presents evidence regarding the post-earnings announcement drift (PEAD) anomaly for the Greek market in the years 2000–2006 (covering earnings announcements in the years 2001–2007). The impact of the introduction of International Financial Reporting Standards on the size and prevalence of the PEAD anomaly is examined. Unlike recent evidence for the US market we find PEAD to be alive and well, and of growing importance in our Greek sample. It may be the adoption of international financial reporting standards (IFRS) has served to reduce earnings predictability in Greece and thus enhance PEAD in the Athens stock exchange (ASE) market. This contrasts strongly with US evidence that the post-earnings-announcement drift anomaly is now waning as more efficient markets and smarter, fundamentals-based, traders arbitrage its impact on stock prices.

scholarly journals RELEVANSI NILAI INFORMASI AKUNTANSI ALTERNATIF SERTA IMPLIKASINYA TERHADAP PROSES PENGAMBILAN KEPUTUSAN INVESTASI DENGAN MENGGUNAKAN SEQUENTIAL EXPLANATORY MIXED METHOD

2020 ◽  
Vol 3 (1) ◽  
pp. 87
Author(s):  
Mada Purwanto Wahyu Nugroho ◽  
Ahmad Syifaudin
Keyword(s):  
Mixed Method ◽  
Stock Prices ◽  
Stock Price ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Statements ◽  
Sources Of Information ◽  
Sequential Explanatory Mixed Method ◽  
Sequential Explanatory

Distortion of information is one of the inherent accounting risks in financial statements. Financial statements are one of the fundamental sources of information that can be used in investment decision making in the Indonesia stock exchange. If investors use this information, then investors also have the same risk that is the distortion of information contained in financial statements. This research tries to test whether stock prices can be more explained through alternative accounting information or information contained in financial statements. This research was conducted using a sequential explanatory mixed method. Using data on companies listed in the Business 27 index, tested using path analysis through multiple regression models, the results of this research indicate that alternative accounting information has not been able to explain variations in stock price changes compared to accounting information contained in financial statements. Meanwhile, the results of the analysis using qualitative data indicate there is a match between the results of quantitative analysis and qualitative analysis. Keywords: Value Relevance; Alternative Accounting Information; Investment Decisions

scholarly journals Relevance of earnings and book value: Evidence from listed pharmaceutical companies

2020 ◽  
Vol 18 (1) ◽  
pp. 196-206
Author(s):  
Mwila Mulenga ◽  
Meena Bhatia
Keyword(s):  
Decision Making ◽  
Stock Returns ◽  
Stock Prices ◽  
Value Relevance ◽  
Accounting Information ◽  
Least Square ◽  
Sufficient Evidence ◽  
Pharmaceutical Companies ◽  
Book Value ◽  
The Impact

For accounting information to be useful for decision making it is essential that it is relevant for decision-making and should have a significant relation with stock prices or stock returns. Value relevance research aims to explain the impact of accounting information on stock prices or stock returns. This study examines the value relevance of earnings and book values on listed Indian pharmaceutical companies’ stock prices by using the Ohlson price model. The study gathered a series of panel data from 2006 to 2015 from the Nifty Pharma index. Ordinary least square and panel regression estimation were done using EViews. The findings provide sufficient evidence of those earnings per share (EPS) and book value per share (BVPS) jointly and individually for the Nifty Pharma index sample played an essential role in influencing stock prices. However, there is an insignificant decline in the combined value relevance of EPS and BVPS. The findings reveal that the EPS and BVPS played an important role in influencing stock prices. However, explanatory powers of EPS and BVPS in all years are significantly lower than that of developed countries. Overall findings show mixed results on the considerable influence of firm size on the value relevance of accounting information. This study’s findings have implications for analysts, investors, and other market participants; they should use EPS and BVPS in the equity valuation of pharmaceutical companies for better allocation of resources in capital markets.

scholarly journals Does Demutualization Spur Liquidity?

2020 ◽  
Vol 3 (1) ◽  
pp. 15-26
Author(s):  
Farman Ali ◽  
Man Wang ◽  
Imran Ali ◽  
Syed Tauseef ALi
Keyword(s):  
Social Welfare ◽  
Transaction Cost ◽  
Stock Exchange ◽  
Three Dimensions ◽  
Empirical Literature ◽  
Trading Activity ◽  
Listed Firms ◽  
Market Depth ◽  
Prior Literature ◽  
The Impact

Purpose: The literature on demutualization is confined to efficiency and social welfare issues. Little empirical literature exists on the effect of demutualization on listed firms. This study examines the impact of demutualization on the liquidity of listed firms’ stocks. Methodology: It empirically investigates how the liquidity of listed firms’ stocks is affected by demutualization. Analyzing data of 137 non-financial firms listed on the Pakistan Stock Exchange for 2005 to 2017, we employ fixed effect regression to test the hypotheses. Findings: We find that demutualization has significantly improved liquidity. We analyze all three dimensions of liquidity that are the trading activity, market impact, and transaction cost. We find that demutualization increases trading activity, improve market depth, and has reduced the transaction cost.  Implications: Our findings suggest that demutualization is beneficial not only for listed firms but also for its shareholders as all three dimensions of liquidity are improved by demutualization. Stock exchanges that are not demutualized and are facing liquidity problem, can be improved by changing its structure from mutual to demutualized. Originality: Prior literature focuses on the impact of demutualization on the stock market or social welfare. There is scares research on the effect of demutualization of the listed firm. This study fills this gap by analyzing the impact of demutualization on listed firms' liquidity in a developing economy, such as Pakistan.

scholarly journals The impact of the Law on Strengthening the Security of Financial Relations on the value relevance of accounting information in Tunisian Stock Exchange

2013 ◽  
Vol 3 (1) ◽  
pp. 42
Author(s):  
Mohamed Rafik Ben Ayed ◽  
Ezzeddine Abaoub
Keyword(s):  
Stock Returns ◽  
Value Relevance ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Accounting Information ◽  
Financial Statements ◽  
Accounting Earnings ◽  
The Law ◽  
Security Returns ◽  
The Impact

This paper empirically investigates the value relevance of accounting earnings measures in the emerging capital market of Tunisia. The issue is tested by estimating the regression of annual security returns on different earnings measures extracted from income statements. In Tunisia, firms prepare their financial statements in accordance with Tunisian Accounting Standards (TAS) which are inspired from International Financial Reporting Standards (IFRS). Based on a sample of 389 firm years for firms listed on the Tunis Stock Exchange (TSE) during the period 1997-2008 and using pooled regressions, we find that accounting earnings measures are weakly related to security returns. However, we find that earnings before taxes has the higher explanatory power for stock returns. This is perhaps due to the fact that financial statements are often influenced by taxation rules (ROSC, 2006; section 42). Further, we find that cash flow from operations and Total accruals are not value relevant for valuation. We tested whether the value relevance of each measure of performance improved after the adoption in October 2005 of the Law on Strengthening the Security of Financial Relations (LSSFR). Consistent with prior US and other international findings, results show that the explanatory power and the magnitude of the slope coefficient of each measure increased when we take into account for the impact of this enactment. However, the increase is not statistically significant. This is perhaps due to the employed specification of the relation between security returns and accounting information.

scholarly journals Audit Committee and Value Relevance of Accounting Information of Listed Hotels and Travels in Sri Lanka

2018 ◽  
Vol 9 (2) ◽  
pp. 387
Author(s):  
Saseela Balagobei
Keyword(s):  
Sri Lanka ◽  
Audit Committee ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Study Data ◽  
Book Value ◽  
Secondary Sources ◽  
Corporate Governance Mechanisms ◽  
The Impact

The audit committee (AC) is the potential mechanism that reduces the agency problems in organizations and investigating this mechanism separate from alternate corporate governance mechanisms may have led to different results in the literature. The aim of this study is to examine the impact of audit committee on value relevance of accounting information of listed hotels and travels in Sri Lanka. Value relevance of accounting information is measured by earning per share (EPS) and book value per share (BVPS) while Audit committee consists of AC size, AC independence, AC experts and AC meetings. The sample consists of 15 hotels and travels listed in Colombo Stock Exchange. In this study, data was collected from secondary sources and hypotheses are examined by using Pearson’s correlation and regression analysis. The results reveal that audit committee attributes such as AC size, AC experts and AC meetings have a significant impact on book value per share of listed hotels and travels in Sri Lanka. Further only AC experts influence earnings per share. AC independence is not found to have a significant impact on the value relevance of accounting information. The findings could be useful to regulators in other jurisdiction who are looking at ways to enhance the effectiveness of audit committee, overall firm governance.

scholarly journals Impact of Accounting Information on Share Price: Empirical Evidence from Pakistan Stock Exchange

2016 ◽  
Vol 3 (1) ◽  
pp. 124
Author(s):  
Muhammad Asif ◽  
Kashif Arif ◽  
Waqar Akbar
Keyword(s):  
Capital Market ◽  
Stock Prices ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Accounting Information ◽  
Time Frame ◽  
Share Price ◽  
Share Prices ◽  
The Impact ◽  
The Relationship

Purpose—The purpose of this paper is to examine the relationship between accounting information and share price. In order to achieve this, a model that includes specific accounting ratios (earning per share, book value per share, capital employed per share and operating cash flow per share) and shares a price is developed. Design/methodology/approach—The data were collected from the companies listed in KSE-30 index. The time frame spans from 2006 to 2013 and OLS regression models were used to examine the relationshipsFindings—The resulting evidence suggest that accounting information parameters have significant influence on share price and they have joint explanatory power in determining stock prices. This research finds the consistent results with pervious empirical researches.Originality/value—The present study adds to the existing literature by examining the impact of accounting information on share prices within the context of an emerging capital market such as Pakistan Stock Exchange using KSE-30 companies. This is believed to be the first study which considers the aforementioned issues in the Pakistan’s capital market environment.

scholarly journals Do stock prices reflect regulatory reforms in the corporate governance mechanisms?

2016 ◽  
Vol 13 (2) ◽  
pp. 419-431 ◽  
Author(s):  
Constantinos Chalevas ◽  
Christos Tzovas
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Stock Prices ◽  
Value Relevance ◽  
Stock Exchange ◽  
Economic Value ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Athens Stock Exchange ◽  
Regulatory Reforms

This study provides evidence on the value relevance of corporate governance mechanisms in a developing stock exchange. It empirically investigates the effect of corporate governance mechanisms prescribed by the corporate governance law (L.3016/2002) on abnormal stock returns for firms listed in the Athens Stock Exchange (ASE). The first corporate governance law in Greece aims to improve the existing corporate governance framework. However, stock prices seem no to be affected by the regulatory reforms in the corporate governance mechanisms. Three reasons are given: (1) the fundamental economic value of a firm is not affected by the introduction of corporate governance mechanisms; (2) the fundamental economic value of a firm is affected by the introduction of corporate governance mechanisms but due to the fact that the Greek stock market is not efficient share prices do not reflect firm’s fundamental economic value; and (3) investors may not be convinced that corporate governance mechanisms significantly affect the performance of a company.The findings of this study can facilitate legislators in improving the existing legislation concerning corporate governance and in developing a new one.

scholarly journals i, The Impact of Adoption of IFRS 9 on the Value Relevance Accounting Information for the Companies Listed in ISX

2021 ◽  
Vol 11 (3) ◽  
Author(s):  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan ◽  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Statements ◽  
Book Value ◽  
Earnings Information ◽  
Income Statement ◽  
Ifrs 9 ◽  
The Impact ◽  
The Relationship

This research aims to know the effect of adopting IFRS 9 on the relevance of the value of the accounting information of the companies in the Iraqi Stock Exchange. Researchers relied on analyzing the financial statements of 10 listed companies for years 2016 – 2019. Researchers used the Ohlson price model to test the relationship between accounting information and value relevance. The research indicated that there is a significant relationship between the adoption of IFRS 9 and the relevance of the value of the earnings and the book value, but the earnings information is more relevance than the book value information, it is due to the interest of investors in the income statement in making investment decisions.

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