Does the information environment affect the value relevance of financial statement data?

Aleksanyan, M. (2009) Does the information environment affect the value relevance of financial statement data? Applied Economics Letters, 16(8), pp. 835-839. (doi:10.1080/13504850701221972)

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Publisher's URL: http://dx.doi.org/10.1080/13504850701221972

Abstract

Recent studies demonstrate that the usefulness of financial statement data for valuation of stocks varies depending on specific economy- and firm-level conditions. This empirical study identifies a novel firm-level influential condition. It hypothesizes and finds that for firms that trade at a premium to book value the value-relevance of two fundamental financial statement value drivers (i.e. earnings and book value), is negatively related to the level of sophistication of the firm's information environment. However, for firms that trade at a discount to book value, the level of sophistication of information environment does not affect the value-relevance of these financial statement value drivers. The level of complexity of the firm's information environment is proxied by the firm's capitalized value. The empirical analysis is based on a sample of nonfinancial firms listed on the London Stock Exchange.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Aleksanyan, Dr Mark
Authors: Aleksanyan, M.
Subjects:H Social Sciences > HB Economic Theory
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Applied Economics Letters
Publisher:Taylor & Francis
ISSN:1350-4851
ISSN (Online):1466-4291
Copyright Holders:Copyright © Taylor and Francis 2009
First Published:First published in Applied Economics Letters 16(8):835-839
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher.

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