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Consistency, Value Relevance and Sufficiency of Book for Market Values in Five Japanese Conglomerates Over the Period 1950–2004

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  • TERENCE COOKE
  • TERUYO OMURA
  • ROGER WILLETT

Abstract

Market and accounting data for five Japanese conglomerates, Toyota, Fuji, Sony, Itochu and Sumitomo, are analysed over the period 1950 to 2004. Annual market value is regressed on three accounting and six macroeconomic variables, using a general‐to‐specific approach to construct simple error correction models for each of the five firms. The results show that in four of the five firms there is evidence of a long‐run relationship between market value and the net book value of assets, which can be interpreted, with increasing degrees of strength, as book values being either consistent with, value relevant for, or sufficient for market value.

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  • Terence Cooke & Teruyo Omura & Roger Willett, 2009. "Consistency, Value Relevance and Sufficiency of Book for Market Values in Five Japanese Conglomerates Over the Period 1950–2004," Abacus, Accounting Foundation, University of Sydney, vol. 45(1), pages 88-123, March.
  • Handle: RePEc:bla:abacus:v:45:y:2009:i:1:p:88-123
    DOI: 10.1111/j.1467-6281.2009.00279.x
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    File URL: https://doi.org/10.1111/j.1467-6281.2009.00279.x
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    Cited by:

    1. Victoria J. Clout & Roger Willett & Tom Smith, 2016. "Analysing the market–book value relation in large Australian and US firms: implications for fundamental analysis and the market–book ratio," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 56(4), pages 1017-1040, December.

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