Value-relevance of Earnings and Book Value Over the Institutional Transition in China: The Suitability of Fair Value Accounting in This Emerging Market ¬リニ
نویسندگان
چکیده
This paper investigates the value-relevance of earnings and book value over 20 years of institutional transition in China, from 1991 to 2010, and explores the suitability of Fair Value Accounting (FVA) in the emerging capital market. In contrast to findings in the mature market, we find that the combined value-relevance of earnings and book value of listed firms in China has significantly increased with the improvement of accounting regulations and the development of market mechanisms. The incremental value-relevance of earnings keeps steady and shows a tendency to slightly decrease. Meanwhile, the incremental value-relevance of book value has significantly increased. We have not found evidence that FVA contributes to the improvement of value-relevance of earnings and book value due to IFRS convergence and the consequent application of FVA. © 2015 University of Illinois. All rights reserved. JEL classification: M41
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