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Value Relevance of Accounting Information of Stock Returns with the Moderating Role of Firm’s Ownership Structure: A Case Study of Initial Public Offerings in Pakistan

Author

Listed:
  • Zeshan Jalil Ghazi

    (PHD Scholar, Institute of Business Administration, Khwaja Fareed University of Engineering and Information Technology (KUEIT), Rahim Yar Khan, Pakistan)

  • Dr. Waleed Khalid

    (Assistant Professor, Institute of Business Administration, KFUEIT, Rahim Yar Khan, Pakistan)

  • Dr. Abdul Rasheed

    (Assistant Professor, Institute of Business Administration, KFUEIT, Rahim Yar Khan, Pakistan)

Abstract

This study investigates the effect of VRAI on stock returns moderating the role of ownership structure between accounting information variables and stock returns. The study used the data of 92 firms conducting initial public offerings (IPOs) registered on the Pakistan Stock Exchange from 2000 to 2022. The study found that EPS, CEPS and book value are positive and significant factors in the stock returns of firms during IPOs. However, the study found that the influence of variables NI, CNI and DPS on SR is positive but statistically insignificant. Similarly, the study also found that ownership structure is positively and significantly related to stock returns during IPOs. The moderation analysis shows that the ownership structure significantly moderates the relationship between EPS and stock returns, CEPS and stock returns and BV and stock returns. Keeping in view the study outcomes, it is concluded that accounting information variables are key to influencing the stock returns of firms during IPOs. Similarly, ownership structure plays an imperative role in moderating the relationship between accounting information variables and stock returns during firms conducting initial public offerings.

Suggested Citation

  • Zeshan Jalil Ghazi & Dr. Waleed Khalid & Dr. Abdul Rasheed, 2024. "Value Relevance of Accounting Information of Stock Returns with the Moderating Role of Firm’s Ownership Structure: A Case Study of Initial Public Offerings in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 412-417.
    • Handle: RePEc:rfh:bbejor:v:13:y:2024:i:2:p:412-417
    DOI: https://doi.org/10.61506/01.00345
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    References listed on IDEAS

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    2. Yathra Mullage Gunaratne & P. A. Niluka Anuradha, 2017. "Value Relevance of Accounting Information in Explaining Stock Returns in Sri Lanka," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(10), pages 223-223, September.
    3. Yongming Shi & Khalid Ahmed & Sudharshan Reddy Paramati, 2021. "Determinants of stock market development and price volatility in ASEAN plus three countries: The role of institutional quality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 560-572, January.
    4. Sajjad Hossine Sharif, 2019. "The Impact of Capital Structure on Stock Return of Selected Firms in the Pharmaceutical and Chemical Sector in Bangladesh," International Journal of Social Sciences Perspectives, Online Academic Press, vol. 5(1), pages 9-21.
    5. Francis, J & Schipper, K, 1999. "Have financial statements lost their relevance?," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 319-352.
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