Value relevance of earnings and book value: evidence from Jordan
This paper examines the value relevance of earnings and book value of equity (individually and in aggregate), relative to price and return models, for Jordanian industrial companies for the period 1992 to 2002.The main findings of this paper are twofold.First, relative to price model, the value rele...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Canadian Center of Science and Education
2012
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/12674/1/12551-45328-1-PB.pdf |
| _version_ | 1825803047587020800 |
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| author | Shamki, Dhiaa Abdul Rahman, Azhar |
| author_facet | Shamki, Dhiaa Abdul Rahman, Azhar |
| author_sort | Shamki, Dhiaa |
| collection | UUM |
| description | This paper examines the value relevance of earnings and book value of equity (individually and in aggregate), relative to price and return models, for Jordanian industrial companies for the period 1992 to 2002.The main findings of this paper are twofold.First, relative to price model, the value relevance of both earnings and book value (individually) have increased, whilst the value relevance of earnings increased and book value became irrelevant in their combination. Secondly, relative to return model, the value relevance of earnings either individually or in aggregate has increased while that of book value has declined.Overall, it is found that earnings
are more important in explaining the variance in share price and return than book value.Furthermore, the results indicate that earnings and book value individually are more value relevant in price model.In contrast, these variables in aggregate are more value relevant in return model.The study shows that earnings help more in explaining market values in Jordanian industrial companies.This paper is the first in using price and return models in one study in Jordan. |
| first_indexed | 2024-07-04T05:50:31Z |
| format | Article |
| id | uum-12674 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T05:50:31Z |
| publishDate | 2012 |
| publisher | Canadian Center of Science and Education |
| record_format | eprints |
| spelling | uum-126742016-04-21T02:00:41Z https://repo.uum.edu.my/id/eprint/12674/ Value relevance of earnings and book value: evidence from Jordan Shamki, Dhiaa Abdul Rahman, Azhar HB Economic Theory This paper examines the value relevance of earnings and book value of equity (individually and in aggregate), relative to price and return models, for Jordanian industrial companies for the period 1992 to 2002.The main findings of this paper are twofold.First, relative to price model, the value relevance of both earnings and book value (individually) have increased, whilst the value relevance of earnings increased and book value became irrelevant in their combination. Secondly, relative to return model, the value relevance of earnings either individually or in aggregate has increased while that of book value has declined.Overall, it is found that earnings are more important in explaining the variance in share price and return than book value.Furthermore, the results indicate that earnings and book value individually are more value relevant in price model.In contrast, these variables in aggregate are more value relevant in return model.The study shows that earnings help more in explaining market values in Jordanian industrial companies.This paper is the first in using price and return models in one study in Jordan. Canadian Center of Science and Education 2012 Article PeerReviewed application/pdf en cc_by https://repo.uum.edu.my/id/eprint/12674/1/12551-45328-1-PB.pdf Shamki, Dhiaa and Abdul Rahman, Azhar (2012) Value relevance of earnings and book value: evidence from Jordan. International Journal of Business and Management, 7 (3). pp. 133-141. ISSN 1833-3850 http://dx.doi.org/10.5539/ijbm.v7n3p133 doi:10.5539/ijbm.v7n3p133 doi:10.5539/ijbm.v7n3p133 |
| spellingShingle | HB Economic Theory Shamki, Dhiaa Abdul Rahman, Azhar Value relevance of earnings and book value: evidence from Jordan |
| title | Value relevance of earnings and book value: evidence from Jordan |
| title_full | Value relevance of earnings and book value: evidence from Jordan |
| title_fullStr | Value relevance of earnings and book value: evidence from Jordan |
| title_full_unstemmed | Value relevance of earnings and book value: evidence from Jordan |
| title_short | Value relevance of earnings and book value: evidence from Jordan |
| title_sort | value relevance of earnings and book value evidence from jordan |
| topic | HB Economic Theory |
| url | https://repo.uum.edu.my/id/eprint/12674/1/12551-45328-1-PB.pdf |
| work_keys_str_mv | AT shamkidhiaa valuerelevanceofearningsandbookvalueevidencefromjordan AT abdulrahmanazhar valuerelevanceofearningsandbookvalueevidencefromjordan |