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The Impact of Fair Value Accounting on Information Asymmetry: Evidence from Jordanian Banking Sector

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  • Mohammad Abdullah Fayad Altawalbeh

Abstract

This study aims at examining the impact of Fair value accounting measured by other comprehensive income on information asymmetry measured by the bid-ask spread in the Jordanian banking sector between 2010 and 2017. The study sample consisted of the thirteen commercial banks listed in Amman Stock Exchange, and panel data analyses were employed to test the study hypothesis, data for the study was gathered through the annual financial reports disclosed on Amman Stock Exchange. The findings revealed that fair value has a negative and significant impact on information asymmetry in the Jordanian commercial banks, indicating that fair value accounting supplies stakeholders with accurate and appropriate data and reflects the informational value of fair value numbers to investors.

Suggested Citation

  • Mohammad Abdullah Fayad Altawalbeh, 2020. "The Impact of Fair Value Accounting on Information Asymmetry: Evidence from Jordanian Banking Sector," International Business Research, Canadian Center of Science and Education, vol. 13(9), pages 1-55, September.
    • Handle: RePEc:ibn:ibrjnl:v:13:y:2020:i:9:p:55
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    References listed on IDEAS

    as
    1. Hui-Sung Kao & Tzu-Han Wei, 2014. "The Effect of IFRS, Information Asymmetry and Corporate Governance on the Quality of Accounting Information," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(2), pages 226-256.
    2. Skrålan Vergauwe & Ann Gaeremynck, 2019. "Do measurement-related fair value disclosures affect information asymmetry?," Accounting and Business Research, Taylor & Francis Journals, vol. 49(1), pages 68-94, January.
    3. Hui-Sung, Kao & Tzu-Han Wei, 2014. "The Effect of IFRS, Information Asymmetry and Corporate Governance on the Quality of Accounting Information," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(2), pages 226-256, February.
    4. 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.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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