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Accounting Tradition and other drivers of the Fair Value choice: An Opportunistic Management perspective

Author

Listed:
  • Marco Fasan

    () (Dept. of Management, Università Ca' Foscari Venice)

  • Carlo Marcon

    () (Dept. of Management, Università Ca' Foscari Venice)

Abstract

The present study tests the impact of accounting tradition, financial leverage and book to market ratio on the fair value choice for a sample of 427 Anglo-Saxon and Continental European companies. We show that, in terms of accounting choices, differences between Anglo-Saxon and Continental European firms still exist, with the former being more likely to choose fair value, consistently with their accounting tradition. By relying on the opportunistic management and accounting choice literature, we test the impact of other two drivers of the fair value choice (financial leverage and price to book ratio) in the two different contexts (Anglo-Saxon and Continental European) and we find that these two drivers have different implications conditional on the context. This implies that empirical evidence gathered in the Anglo-Saxon context cannot be generalized sic et simpliciter to the Continental European context.

Suggested Citation

  • Marco Fasan & Carlo Marcon, 2014. "Accounting Tradition and other drivers of the Fair Value choice: An Opportunistic Management perspective," Working Papers 13, Department of Management, Università Ca' Foscari Venezia.
  • Handle: RePEc:vnm:wpdman:84
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    Keywords

    accounting choice; fair value; accounting;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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