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Who do you trust while bubbles grow and blow? : A comparative analysis of the explanatory power of accounting and patent information for the market values of German firms

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Author Info
Reitzig, Markus
Ramb, Fred
Abstract

We present a theoretical and empirical analysis of the fitness of national German (German Commercial Code - Handelsgesetzbuch (HGB)) and international (IAS and US-GAAP) accounting information, as well as European patent data to explain the market values of German manufacturing firms. For the chosen volatile period from 1997 to 2002, cautious national accounting information does not correlate with the firms? residual market values (RMV). International accounting information makes no meaningful contribution to explaining firms? RMV and seems to measure overinvestment only. Finally, patents counted at the individual country level correlate with the firms? RMV. --

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Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2004,17.

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Date of creation: 2004
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Handle: RePEc:zbw:bubdp1:2162

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Related research
Keywords: Accounting standards; investor information; market value; patents;

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Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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    Other versions:
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    Other versions:
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    Other versions:
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  18. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation, Yale University. [Downloadable!]
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    Other versions:
  25. Bosworth, Derek & Rogers, Mark, 2001. "Market Value, R&D and Intellectual Property: An Empirical Analysis of Large Australian Firms," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 323-37, December. [Downloadable!] (restricted)
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