The association between accounting information and share prices in developing countries: does corruption matter?

Michael Deterding and Marius Gros

International Journal of Economics and Accounting, 2021, vol. 10, issue 3, 321-339

Abstract: The extant value relevance literature documents that the association between accounting information and share prices differs from country to country. Numerous studies attempt to explain the observed differences and identify their determinants, such as the system of corporate governance, the level of shareholder protection, or differences in accounting standards. To date, there is no paper that explicitly addresses the influence of a country's state of development and the level of corruption on the value relevance of accounting information. We fill this gap, as our analysis indicates that accounting information is more value relevant in less developed countries and in countries with high levels of corruption. We argue that in developing countries with high levels of corruption, capital market participants rely in particular on accounting information to compensate for a lack of reliable alternative information sources.

Keywords: value relevance; state of development; corruption; developing countries. (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=116691 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:ids:ijecac:v:10:y:2021:i:3:p:321-339

Access Statistics for this article

More articles in International Journal of Economics and Accounting from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().