The value relevance of earnings and book value at Vietnamese listed enterprises
-
DOIhttp://dx.doi.org/10.21511/imfi.20(2).2023.16
-
Article InfoVolume 20 2023, Issue #2, pp. 182-192
- 468 Views
-
183 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Relevant value is important for information users to make business decisions, and stock prices have an essential relationship to the value relevance about enterprises. The paper aims to investigate the earnings and book value influences on the value relevance of 144 Vietnamese listed enterprises. Selected data are non-financial enterprises with a wide range of industries to ensure representativeness on the Vietnamese stock market. The research implements stakeholder and signaling theory to explain the hypotheses of the model related to earnings per share and book value per share. Time series data are analyzed for three years from 2018 to 2020. The quantitative method is applied to test hypotheses. The results determine that the fixed effects model is suitable. The results also show that the earnings per share positively affect the stock price, but book value per share has a negative impact on the stock price. The paper provides some policy suggestions for investors to make reasonable decisions using relevant information about listed enterprises in Vietnam.
- Keywords
-
JEL Classification (Paper profile tab)G14, G18, M41
-
References36
-
Tables8
-
Figures0
-
- Table 1. Descriptive statistics
- Table 2. Matrix of correlation
- Table 3. Ordinary Least Squares (OLS) regression results
- Table 4. Fixed effects model (FEM) regression results
- Table 5. F-test results
- Table 6. Regression results by random effects model (REM)
- Table 7. Hausman test results
- Table 8. Hypothesis testing results
-
- Abiodun, B. Y. (2012). Significance of accounting information on corporate values of firms in Nigeria. Research Journal in Organizational Psychology & Educational Studies, 1(2), 105-113.
- Alade, M., Olweny, T., & Oluoch, O. (2017). Compliance with IFRS and value relevance at the Nigerian stock market. International Journal of Economics, Commerce and Management, 5(7), 109-110.
- Al-Ani, M. K., & Tawfik, O. I. (2021). Effect of Intangible Assets on the Value Relevance of Accounting Information: Evidence from Emerging Markets. The Journal of Asian Finance, Economics, and Business, 8(2), 387-399.
- Baboukardos, D., & Rimmel, G. (2016). Value relevance of accounting information under an integrated reporting approach: A research note. Journal of Accounting and Public policy, 35(4), 437-452.
- Barth, M. E., Landsman, W. R., & Lang, M. H. (2008). International accounting standards and accounting quality. Journal of Accounting Research, 46(3), 467-498.
- Barth, M. E., Li, K., & McClure, C. (2021). Evolution in value relevance of accounting information. Social Science Research Network, 17-24.
- Batistella, A. J., Dal Magro, C. B., Mazzioni, S., & Paulo, E. (2021). Relevance of accounting information and national culture. Revista de Contabilidade e Organizações, 15, 1-14.
- Camodeca, R., Almici, A., & Brivio, A. R. (2014). The value relevance of accounting information in the Italian and UK stock markets. Problems and Perspectives in Management, 12(2), 512-519.
- Chandrapala, P. (2013). The value relevance of earnings and book value: The importance of ownership concentration and firm size. Journal of Competitiveness, 5(2), 98-107.
- Collins, D. W., Maydew, E. L., & Weiss, I. S. (1997). Changes in the value-relevance of earnings and book values over the past forty years. Journal of Accounting and Economics, 24(1), 39-67.
- Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A review and assessment. Journal of Management, 37(1), 39-67.
- Elbakry, A. E., Nwachukwu, J. C., Abdou, H. A., & Elshandidy, T. (2017). Comparative evidence on the value relevance of IFRS-based accounting information in Germany and the UK. Journal of International Accounting, Auditing and Taxation, 28, 10-30.
- FASB (2021). Qualitative Characteristics of Accounting Information. Statement of Financial Accounting Concepts No. 8–CON8.
- Freeman, E. (1984). Strategic Management: A stakeholder Approach. Boston: Pitman.
- Gan, C. Y., Chong, L. L., & Ahmad, Z. (2016). Impacts of FRS139 adoption on value relevance of financial reporting in Malaysia. Managerial Finance, 42(7), 706-721.
- Garefalakis, A., Lappa, E., Mantalis, G., Xanthos, G., & Spinthiropoulos, K. (2015). How IFRS affects the return on asset? & is more value relevant constructed based on IFRS than based on local GAAP?. International Research Journal of Finance and Economics, 142, 122-131.
- Hair, J. F., Black, W. C., Babin, B. J. & Andersom, R. E. (2010). Multivariate Data Analysis. New Jersey: Pearson Prentice Hall.
- IASB (2018). The Conceptual Framework for Financial Reporting (Chapter 2 - Qualitative characteristics of useful financial information).
- Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
- Kargın, S. (2013). The impact of IFRS on the value relevance of accounting information: Evidence from Turkish firms. International Journal of Economics and Finance, 5(4), 71-80.
- Lam, K. C., Sami, H., & Zhou, H. (2013). Changes in the value relevance of accounting information over time: Evidence from the emerging market of China. Journal of Contemporary Accounting & Economics, 9(2), 123-135.
- Maigoshi, Z. S., Latif, R. A., & Kamardin, H. (2018). Change in value-relevance of disclosed RPT across accounting regimes: Evidence from Malaysia. Research in International Business and Finance, 44, 422-433.
- Nguyen, B. N. (2018). Financial statements of small and medium-sized enterprises-users and quality of information on financial statements. Journal of Banking Science & Training, 192(5), 28-34.
- Onali, E., Ginesti, G., & Vasilakis, C. (2017). How should we estimate value-relevance models? Insights from European data. The British Accounting Review, 49(5), 460-473.
- Pervan, I., & Bartulovic, M. (2014). Value relevance of accounting information: evidence from South Eastern European countries. Economic Research-Ekonomska Istraživanja, 27(1), 181-190.
- Prihatni, R., Subroto, B., Saraswati, E., & Purnomosidi, B. (2016). Analysis Of Value Relevance Of Accounting Information During IFRS Period 2008-2014 At The Stock Exchange OF Indonesia. International Academic Institute for Science and Technology, 3(3), 1-10.
- Rogerson, P. A. (2011). More on regression. Statistical methods for geography. SAGE Publications, Ltd, 125-153.
- Ross, S. A. (1973). The economic theory of agency: The principal’s problem. The American Economic Review, 63(2), 134-139.
- Sihaloho, J., & Asep, R. P. SA (2021). The influence of price earnings ratio (PER), earning per share (EPS), price to book value (PBV) on stock prices and firm size as mediators in food and beverage sub-sector manufacturing companies listed on the Indonesia stock exchange 2015–2020. International Journal of Economics, Business and Accounting Research, 5(4), 432-446.
- Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374.
- Suhendra, S., Murwaningsari, E., & Mayangsari, S. (2022). The derivative on the value relevance through tax avoidance and earnings control. Linguistics and Culture Review, 6(1), 510-529.
- Thijssen, M. W. P., & Iatridis, G. E. (2016). Conditional conservatism and value relevance of financial reporting: A study in view of converging accounting standards. Journal of Multinational Financial Management, 37-38, 48-70.
- Truong, D. L. & Nguyen, M. N. (2016). The influence of accounting information on stock prices: Empirical evidence from the Ho Chi Minh City Stock Exchange. Journal of Science Ho Chi Minh City Open University-Economics and Business Administration, 11(2), 117-126.
- Tran, T. T. H. (2020). Perspectives on the appropriateness of accounting information and how it is measured. Journal of Accounting & Auditing, 6, 35-37.
- Tsalavoutas, I., André, P., & Evans, L. (2012). The transition to IFRS and the value relevance of financial statements in Greece. The British Accounting Review, 44(4), 262-277.
- Wuryani, E. (2021). The influence of using fundamental and technical analysis on share prices. Ekspektra: Jurnal Bisnis dan Manajemen, 5(2), 103-111.