The Association between Security Prices and Financial Information in the Spanish Stock Market

The impact of regulatory reform on the value-relevance of accounting information: Evidence from the 1993 regulatory reforms in New Zealand

“…Ballester and Livnat (1997) examine the association of prices and earnings in the Spanish security market pre-and post-1990. Their study was motivated by a shift in the accounting system in Spain from tax-based GAAP pre-1990 to a "true and fair view" system of accounting post-1990, that the authors hypothesized should increase the relevance of accounting numbers to shareholders.…”

“…The studies by Ballester and Livnat (1997), Giner and Rees (1999) and Ely and Waymire (1999) report mixed results with respect to changes in the value-relevance of financial information after regulatory changes. None of these studies, however, incorporated the possible impact of fundamental economic factors on the temporal changes in value-relevance of accounting information, as is done by Collins, Maydew and Weiss (1997) and Lev and Zarowin (1999).…”

“…Earlier empirical studies on the impact of regulatory reform on the value-relevance of accounting information (Ballester & Livnat, 1997;Ely & Waymire, 1999;Giner & Rees, 1999) are based on a simple comparison of the adjusted R 2 s in the pre-and post-regulatory periods. This change in adjusted R 2 s, however, is difficult to attribute to changes in regulatory reform if other fundamental economic factors that could affect the value-relevance of accounting information remain uncontrolled.…”

The Market Valuation Of Earnings In Germany, The United Kingdom And The United States

“…Warner (1980) provide support for this method, concluding the test using risk adjusted returns are no more powerful than tests using returns that had not been adjusted for systematic risk in tests using monthly data. 7 All t-statistics for pooled data have been adjusted for heteroskedasticity using the method suggested by White (1980).…”

“…The results of the two initial regressions testing H1 are presented in Table 3. 7 The CEPS regressions reveal a positive and significant relationship between CEPS and excess returns in all three countries. The coefficient on CEPS for both Germany and the UK is approximately 0.14 and is significant at less that 0.01.…”