«Leif Atle Beisland University of Agder Dissertation submitted to the Department of Accounting, Auditing and Law at the Norwegian School of Economics ...»
Nevertheless, the negative relationship between environmental performance and the market value of equity indicates that firms rated highly in terms of environmental performance are
to high environmental performance being costly and thus having a negative impact on expected earnings and market values.
Hellstrøm (2006) investigates the value relevance of accounting information in a transition economy. Her analyses are conducted on a sample from the Czech Republic from 1994-2001.
She states that the objective of the study is to investigate the validity of the value relevance methodology by finding an accounting setting in which the results of value relevance tests might be predicted unambiguously, and that a transition economy represented by the Czech Republic provides such an institutional and accounting setting. As assumed, she finds that value relevance is lower in a transitional economy than in a well-developed market economy (she applies Sweden as her benchmark), but that the value relevance increases over time as a result of the progress in transition. Hellstrøm concludes that as the results of the study confirm the predicted results, they thus provide supportive evidence of the validity of the value relevance methodology. Kirch et al. (2007) apply a sample of Brazilian firms cross-listed in Brazil and the USA to study the stock price effects of earnings releases. Their findings show that there are no surprises in the market during earnings releases. This conclusion holds independently of the accounting principles followed in order to generate the information.
9 Concluding Remarks There is a large number of articles investigating value relevance subjects, and this paper reviews only a small percentage of these. Even though a lot of the reviewed articles are examples of state-of-the-art value relevance research, there are numerous excellent articles that are not commented on in this paper. The purpose of this paper is not to give an all
to and understanding of this line of research. This paper places value relevance research in perspective within capital market-based accounting research. Hopefully, it provides the reader with a fair knowledge of some of the most important conclusions resulting from value relevance research.
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