Value relevance of customer equity beyond financial statements: evidence from mobile telecom industry

Yong Bum Choi, Janghyuk Lee, Shijin Yoo and Yong Keun Yoo

Asia-Pacific Journal of Accounting & Economics, 2019, vol. 26, issue 3, 281-300

Abstract: We investigate the extent of usefulness of customer equity (CE) estimate in explaining market value of equity (MVE) and the determinants of the discrepancy between CE estimate and MVE. Using the data of 17 companies in the mobile telecom companies in 7 countries from 2004 to 2008, we find (1) CE estimate provides incremental value relevant information to explain contemporaneous MVE beyond financial statements, and (2) CE estimate can predict future stock returns by indicating a part of temporal divergence between MVE and a firm’s intrinsic value of equity.

Date: 2019
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DOI: 10.1080/16081625.2017.1386575

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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