Market liberalization and foreign equity portfolio selection in Korea

Kim, Jaemin; Yoo, Sean Sehyun

doi:10.1016/j.mulfin.2008.11.003

Cited by 13 publications

(15 citation statements)

References 24 publications

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“…This leads to the expectation that less information asymmetry or lower cost of information acquisition will be found between domestic and foreign investors in large size companies (Covrig, Lau, & Ng, 2006). The larger the company size, the lower the information asymmetry degree (Kim & Yoo, 2009). A negative association has been found between company size and information in the earnings announcement (Bamber, 1986).…”

Section: Introductionmentioning

confidence: 99%

The Influence of Economic Factors on the Value Relevance of Accounting Information in Jordan

Shamki¹

2013

IJBM

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The paper examines the influence of economic factors namely foreign ownership and trading volume on the value relevance of earnings, book value and cash flows relative to three share price proxies namely average annual share price, annual closing share price and share price after a three-month period following the financial year-end (hereafter ATM-share price), after controlling company's size and leverage for Jordanian services and industrial companies within the period [2004][2005][2006][2007][2008][2009]. Since the paper is the first, as the researcher believes, that examines the influence of foreign ownership and trading volume on the value relevance of earnings, book value and cash flows in an emerging exchange, it aims to provide evidence regarding the influence of these factors on the value relevance of accounting information. The paper found that the value relevance of earnings and book value is greater for companies having foreign ownership and larger trading volume. With the effect of these factors, closing share price shows more response than the other share price proxies. The findings suggest that market participants might be able to extract the firm value via these economic factors. The paper extends the valuation model by including cash flows together with earnings and book value. The findings demonstrate that there is a shift away from earnings towards book value as the basis of firm valuation.

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Section: Introductionmentioning

confidence: 99%

The Influence of Economic Factors on the Value Relevance of Accounting Information in Jordan

Shamki¹

2013

IJBM

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“…They continue that the majority of researchers who tested the political effect use the firm's size as a surrogate of a firm's political sensitivity. In the same way of thinking, prior studies indicate that the firm size is a crucial element which determines the value relevance of accounting information for different reasons; such as larger companies have more information available about them because they are the target of stakeholders, and they are less information asymmetry (Kang and Stulz, 1997;Covrig et al, 2006 andKim andYoo, 2009). However, the conclusions are mixed (Hodgson and Clarke 2000;Ota, 2001;Bae and Jeong 2007;Brimble andHodgson, 2007 andZhang, 2007).…”

Section: Wattsmentioning

confidence: 99%

The Value Relevance of the Financial Statements’ Bottom Lines in the Emerging Egyptian Capital Market

Abousamak¹

2015

SBE

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This study aims to examine the value relevance of the bottom lines of the financial statements in the Egyptian context after the inception of the new version of Egyptian Accounting Standards of 2006. Considering the tradition accounting value of conservatism and the firm size, the price and return models are operationalized using a sample of the most actively traded companies on the Egyptian Stock Market in the period from 2007-2009. Three important conclusions captured from the results; first, the bottom lines of the financial statements are value relevant and the accrual components are upper handed over the cash flow in estimating the market value of those firms. Second, conservatism practices is still alive in the Egyptian context; however, it does not prevent the accounting information from being value relevant. Third, the promulgation of the new version of EASs shifts the value relevance towards book value over the other accounting information. These results should be interpreted in the light of the rapid shift towards capitalism and the deregulation program followed by the Egyptian government in the recent years. Also, these results might possibly be attributed to a significant improvement in the familiarity of the preparers of accounting information with the new accounting practices and the needs of financial reporting users in Egypt. As such, this study contributes to the existing literature by investigating and operationalizing the value relevance of accounting information in an emerging market such as Egypt after the introduction of the new version of EASs of 2006.Section 4 discusses the findings and results of the price and return models. Section 5 gives a conclusion and opportunities for further research.

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“…Other research [9] argued that with the liberalization of stock market, investors can improve their invest efficiency by constructing their portfolio worldwide. The research supports the basic viewpoint that the less market limitation, the larger return will be achieved.…”

Section: Efficiency Frontiermentioning

confidence: 99%

Efficiency Frontier for Chinese Stock Markets under Influence of Financial Crises

Guo¹

2011

Lecture Notes in Electrical Engineering

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Financial crises, like Asian financial crisis in 1997 and credit crunch from USA in 2007, have huge influence worldwide. For the importance and uniqueness of China's stock market, it is interesting and attractive to research it under influence of financial crises. The purpose for this research is to find out the influence of financial crises on Chinese stock market and focus on efficiency frontier. For research methodology, the efficiency frontiers are built using cross-sectional data through linear programming with an optimization model for different periods for Chinese stock markets portfolios and for a portfolio from Chinese, UK and USA stock markets together under current financial crisis. This research finds out that Chinese stock markets have a positive risk return trade off and it varies under the influence of financial crises; the investment efficiency in Chinese stock markets are relative good currently and if further diversified with western markets, higher investment efficiency can be achieved. The implication for this paper is to offer a suitable method to construct Chinese stock market efficiency frontier, and to improve investment efficiency through further diversification. This paper enjoys the originality that it perhaps is the first paper to build Chinese stock market efficiency frontier through linear programming.

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Market liberalization and foreign equity portfolio selection in Korea

Cited by 13 publications

References 24 publications

The Influence of Economic Factors on the Value Relevance of Accounting Information in Jordan

The Influence of Economic Factors on the Value Relevance of Accounting Information in Jordan

The Value Relevance of the Financial Statements’ Bottom Lines in the Emerging Egyptian Capital Market

Efficiency Frontier for Chinese Stock Markets under Influence of Financial Crises

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