Economics at your fingertips  

Inflation Accounting and Stock Returns: Evidence From Istanbul Stock Exchange (ISE)

Berna Kirkulak-Uludag and Çagnur Kaytmaz Balsari

Istanbul Stock Exchange Review, 2009, vol. 11, issue 42, 19-34

Abstract: The purpose of this study is to show the importance of inflation accounting application in investment decision making in particular in stock markets. The effect of inflation accounting on stock returns is examined among the Turkish firms listed on the Istanbul Stock Exchange (ISE) in 2003. Descriptive statistics compared the predictability level of inflation-adjusted and inflation non-adjusted fundamental accounting signals on stock returns. Regression analysis tests the explanatory power of these two different accounting applications on stock returns. The results show that investors mainly take earnings and inflation-adjusted fixed asset ratio into consideration when they make their investment decisions. Furthermore, the results show that inflationadjusted results have slightly more predictive power for stock returns than inflation non-adjusted results suggesting the fact that both inflation-adjusted and inflation nonadjusted financial data complement each other.

Keywords: inflation accounting; stock returns; Istanbul Stock Exchange (ISE); financial ratios (search for similar items in EconPapers)
JEL-codes: G14 M41 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Istanbul Stock Exchange Review from Research and Business Development Department, Borsa Istanbul Contact information at EDIRC.
Bibliographic data for series maintained by Ahmet Palu ().

Page updated 2022-05-27
Handle: RePEc:bor:iserev:v:11:y:2009:i:42:p:19-34