Title: The value relevance of accounting information during the global financial crisis: evidence from Norway
Authors: Leif Atle Beisland
Addresses: Faculty of Economics and Social Sciences, University of Agder, 4604 Kristiansand, Norway
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.
Keywords: value relevance; financial crisis; stock markets; financial reporting; earnings; book value; response coefficients; accounting information; Norway; liquidation values.
International Journal of Economics and Accounting, 2013 Vol.4 No.3, pp.249 - 263
Published online: 29 Apr 2014 *
Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article