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The value relevance of accounting information during the global financial crisis: evidence from Norway

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  • Leif Atle Beisland

Abstract

This study investigates how the recent financial crisis influenced the value relevance of accounting information. The empirical analyses show that the book values of equity explained most of the cross-sectional variation in stock prices during the crisis. Still, the earnings response coefficient increased significantly during the period of the crisis. The analysis suggests a separation between the information content of book values and earnings in a crisis situation. The findings are consistent with book values being highly relevant as a proxy variable for liquidation values in a crisis, whereas earnings, in contrast to the balance sheet, capture information about the future earning capabilities of the firm.

Suggested Citation

  • Leif Atle Beisland, 2013. "The value relevance of accounting information during the global financial crisis: evidence from Norway," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 4(3), pages 249-263.
    • Handle: RePEc:ids:ijecac:v:4:y:2013:i:3:p:249-263
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    Cited by:

    1. Beisland, Leif Atle, 2014. "Equity valuation in practice: The influence of net financial expenses," Accounting forum, Elsevier, vol. 38(2), pages 122-131.

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