• Login
    View Item 
    •   DSpace Home
    • Faculty/Staff Scholarship
    • College of Business & Economics
    • View Item
    •   DSpace Home
    • Faculty/Staff Scholarship
    • College of Business & Economics
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    The Effect of 'Other Information' On Equity Valuation: Kuwait Evidence

    Thumbnail
    Date
    2011
    Author
    Abu-Ghazaleh, Naser
    Al-Hares, Osama
    Haddad, Ayman
    Type
    Journal Article
    Peer-Reviewed
    Metadata
    Show full item record
    Abstract
    Previous studies on the value relevance of accounting information adopt Ohlson’s linear information dynamics which, if ‘other information’ is ignored, leads to a theoretical valuation model solely involving earnings, book value, and net shareholder cash flows or (net dividends). The lack of analysis of ‘other’ value-relevant data may defeat the effectiveness of the Ohlson’s model since the current accounting data cannot fully account for future earnings. The potential implication of ignoring ‘other information’ is that it could introduce bias into estimated coefficients (e.g. Ohlson, 1995; Hand and Landsman, 2005). This study examines the effect of introducing ‘other information’ proxied by lagged ‘valuation error’ on equity valuation, utilizing a sample of non-financial companies listed at the Kuwait Stock Exchange (KSE) over the period 2003 to 2009. Empirical results of this study reveal that our proxy for ‘other information’ appears to capture valuation implications of information other than current variables in the linear information dynamic setting. Results also reveal that adding ‘other information’ to the valuation model clearly reduces the coefficients on earnings and dividends, and increases the coefficient of book value; however, book value and earnings remain significantly associated with stock prices. As a consequence, current accounting variables appear to be capturing some, but not all, of ‘other information’ when this variable is omitted. We conclude that ‘other information’ is an important factor in determining the market value of firms and hence should not be omitted in studies examining the value relevance of accounting information.
    URI
    https://dspace.auk.edu.kw/handle/11675/7658
    External link
    https://clutejournals.com/index.php/JABR/article/view/6466
    Collections
    • College of Business & Economics [190]

    Browse

    All of DSpaceCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsTypeThis CollectionBy Issue DateAuthorsTitlesSubjectsType

    My Account

    LoginRegister

    DSpace software copyright © 2002-2023  DuraSpace
    DSpace Express is a service operated by Atmire