IDEAS home Printed from https://ideas.repec.org/a/eme/parpps/par-03-2013-0019.html
   My bibliography  Save this article

The relation between accounting information-based firm risk proxies and cost of equity capital across countries

Author

Listed:
  • Tony Kang
  • Mark Kohlbeck
  • Yong Yoo

Abstract

Purpose - – The purpose of this paper is to investigate international variability in the pricing of accounting information usingex antecost of equity capital estimates. Prior literature shows that financial statement amounts are relevant for investor decisions only when there is appropriate economic and legal infrastructure (Ball, 2001). Design/methodology/approach - – Accrual quality and accounting loss are focussed upon as indicators of firm risk in financial statements. Findings - – The evidence suggests that accounting information is factored intoex antecost of equity capital in countries with strong economic and legal infrastructures but not in those with weak infrastructures. Findings support Ball’s notion that the role financial reporting plays in a capital market depends on the strength of economic and legal infrastructure. Originality/value - – Findings support Ball’s notion that the role financial reporting plays in a capital market depends on the strength of economic and legal infrastructure.

Suggested Citation

  • Tony Kang & Mark Kohlbeck & Yong Yoo, 2015. "The relation between accounting information-based firm risk proxies and cost of equity capital across countries," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 27(1), pages 69-94, February.
    • Handle: RePEc:eme:parpps:par-03-2013-0019
    DOI: 10.1108/PAR-03-2013-0019
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/PAR-03-2013-0019/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/PAR-03-2013-0019/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/PAR-03-2013-0019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Accrual quality; Accounting losses;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:parpps:par-03-2013-0019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.