The valuation of earnings components by the capital markets. An international comparison

Susana Callao Gast�n, Beatriz Cu�llar Fern�ndez (), Jos� Ignacio Jarne Jarne and Jos� Antonio La�nez Gadea
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Susana Callao Gast�n: Department of Accounting and Finance, University of Zaragoza
Beatriz Cu�llar Fern�ndez: Department of Accounting and Finance, University of Zaragoza
Jos� Ignacio Jarne Jarne: Department of Accounting and Finance, University of Zaragoza
Jos� Antonio La�nez Gadea: Department of Accounting and Finance, University of Zaragoza

Documentos de Trabajo from Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza

Abstract: Over the last decade we have witnessed an increasing process of globalisation in economic activity, in which the capital markets have inevitably been involved. Against this background, this paper presents a comparative study of the relevance of earnings and their components (operating, financial and extraordinary income) in 36 countries that are representative of different regions, levels of market development, accounting systems, etc. The results of our research confirm those obtained from earlier studies, providing evidence of the relevance of earnings figures for valuation purposes, regardless of the market analysed. Nevertheless, the importance of this information differs between countries. We have also established that the disaggregation of earnings into the component parts of the income statement provides the investor with incremental information regarding the market value of the company in question.

Keywords: capital markets; accounting information; value relevance; international comparison. (search for similar items in EconPapers)
JEL-codes: G10 M41 (search for similar items in EconPapers)
Date: 2003-02
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Persistent link: https://EconPapers.repec.org/RePEc:zar:wpaper:dt2003-02

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