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The Value Relevance Of Earnings In A Transition Economy: Evidence From Romanian Stock Market

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  • Lavinia Minodora Takacs

Abstract

The paper examines the value relevance of accounting information in Romanian capital market between 2005 and 2010. Value relevance can be interpreted as the usefulness of accounting data for decision making process of investors and usually its existence is given by a positive correlation between market and book values. The paper main focus is the variation of value relevance over the 6 years period and the influence Romania's adhesion to EU and consequently IFRS implementation had on it. Additionally issues like transition process, accounting reforms and conservatism of financial reporting are taken into consideration as potential explanatory factors for the variation of this fundamental quality of accounting.

Suggested Citation

  • Lavinia Minodora Takacs, 2012. "The Value Relevance Of Earnings In A Transition Economy: Evidence From Romanian Stock Market," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-8.
    • Handle: RePEc:alu:journl:v:1:y:2012:i:14:p:8
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    References listed on IDEAS

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    1. Tiron Tudor, Adriana & Mutiu, Alexandra, 2007. "Important stages in the development of Romanian accounting profession (from 1800 up to now)," De Computis "Revista Española de Historia de la Contabilidad". De Computis "Spanish Journal of Accounting History"., Asociación Española de Contabilidad y Administración de Empresas (AECA). Spanish Accounting and Business Administration Association., issue 6, pages 183-199, June.
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    4. Filip, Andrei & Raffournier, Bernard, 2010. "The value relevance of earnings in a transition economy: The case of Romania," The International Journal of Accounting, Elsevier, vol. 45(1), pages 77-103, March.
    5. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    6. Kousenidis, Dimitrios V. & Ladas, Anestis C. & Negakis, Christos I., 2009. "Value relevance of conservative and non-conservative accounting information," The International Journal of Accounting, Elsevier, vol. 44(3), pages 219-238, September.
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    10. David Aboody & John Hughes & Jing Liu, 2002. "Measuring Value Relevance in a (Possibly) Inefficient Market," Journal of Accounting Research, Wiley Blackwell, vol. 40(4), pages 965-986, September.
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    14. Dobija, Dorota & Klimczak, Karol Marek, 2010. "Development of accounting in Poland: Market efficiency and the value relevance of reported earnings," The International Journal of Accounting, Elsevier, vol. 45(3), pages 356-374, September.
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    Cited by:

    1. Irina-Doina Pășcan & Andreea Chindriș, 2020. "Reporting Lease Contracts According to IFRS 16: Case of Romanian Entities," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1031-1038, December.

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    More about this item

    Keywords

    value relevance; transition economy; accounting earnings; equity valuation;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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