The value relevance of accounting information during the global financial crisis: evidence from Norway
by Leif Atle Beisland
International Journal of Economics and Accounting (IJEA), Vol. 4, No. 3, 2013

Abstract: This study investigates how the recent financial crisis influenced the value relevance of accounting information. The empirical analyses show that the book values of equity explained most of the cross-sectional variation in stock prices during the crisis. Still, the earnings response coefficient increased significantly during the period of the crisis. The analysis suggests a separation between the information content of book values and earnings in a crisis situation. The findings are consistent with book values being highly relevant as a proxy variable for liquidation values in a crisis, whereas earnings, in contrast to the balance sheet, capture information about the future earning capabilities of the firm.

Online publication date: Tue, 29-Apr-2014

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