The value relevance of accounting information during the global financial crisis: evidence from Norway

Leif Atle Beisland

International Journal of Economics and Accounting, 2013, vol. 4, issue 3, 249-263

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. (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecac:v:4:y:2013:i:3:p:249-263

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