The value relevance of earnings in a transition economy: The case of Romania
Andrei Filip and
The International Journal of Accounting, 2010, vol. 45, issue 1, 77-103
We investigate the value relevance of earnings on the Bucharest Stock Exchange. We find that the association between accounting earnings and stock returns is comparable to the levels reported by studies conducted on more mature markets, and that it is higher for securities issued by small companies. Excluding losses from the analysis increases the value relevance of earnings, which confirms the transitory nature of negative earnings, already documented by prior studies. We also find that the regression coefficient of earnings changes is negative and we provide evidence consistent with the hypothesis that it is a consequence of the relative inefficiency of the market. Finally, the "prices lead earnings" hypothesis formulated for more mature markets is not supported by our results.
Keywords: Value; relevance; Transition; economy; Eastern; and; Central; Europe; Romania; Hyperinflation (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:45:y:2010:i:1:p:77-103
Access Statistics for this article
The International Journal of Accounting is currently edited by A. R. Abdel-Khalik
More articles in The International Journal of Accounting from Elsevier
Series data maintained by Dana Niculescu ().