IDEAS home Printed from https://ideas.repec.org/a/vrs/foeste/v24y2024i2p252-279n1013.html
   My bibliography  Save this article

Have COVID-19 and the War in Ukraine Caused a Decline in the Value Relevance of Accounting Information? Evidence from Poland

Author

Listed:
  • Pilch Bartłomiej

    (PhD student, Cracow University of Economics, Collegium of Economics, Finance and Law, Poland)

Abstract

Research background Within the research area of value relevance (VR), the impact of macroeconomic changes is usually analysed. The influence of economic crises, such as the Asian financial crisis, global financial crisis, and COVID-19, on VR was, however, inconclusive. Moreover, it differs between individual markets. Purpose The aim of the paper was to analyse the impact of COVID-19 and the war in Ukraine on the value relevance with the example of Polish listed companies. VR of earnings, book values, and cash flows was taken into account in this regard. Research methodology Panel data models (fixed effects) were used. The focus was especially on interactions between earnings per share (EPS), book values per share (BVPS), cash flows per share (CFO), and binary variables referring to periods of COVID-19 and the war in Ukraine. Results VR of earnings, book values, and cash flows noted the positive impact of COVID-19. However, the war affected book values and cash flows negatively. The results obtained highlight the specificity of different crises and various markets, with the findings being only partially in line with the results of previous studies. Novelty So far, the impact of the war in Ukraine on VR has not been analysed. Moreover, the influence of COVID-19 on VR on the Polish market has also not been studied.

Suggested Citation

  • Pilch Bartłomiej, 2024. "Have COVID-19 and the War in Ukraine Caused a Decline in the Value Relevance of Accounting Information? Evidence from Poland," Folia Oeconomica Stetinensia, Sciendo, vol. 24(2), pages 252-279.
    • Handle: RePEc:vrs:foeste:v:24:y:2024:i:2:p:252-279:n:1013
    DOI: 10.2478/foli-2024-0025
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/foli-2024-0025
    Download Restriction: no
    File URL: https://libkey.io/10.2478/foli-2024-0025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Iwanicz-Drozdowska, Małgorzata & Rogowicz, Karol & Kurowski, Łukasz & Smaga, Paweł, 2021. "Two decades of contagion effect on stock markets: Which events are more contagious?," Journal of Financial Stability, Elsevier, vol. 55(C).
    2. Morris, John J. & Alam, Pervaiz, 2012. "Value relevance and the dot-com bubble of the 1990s," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(2), pages 243-255.
    3. Davis-Friday, Paquita Y. & Eng, Li Li & Liu, Chao-Shin, 2006. "Response to discussion of "The effects of the Asian crisis, corporate governance and accounting system on the valuation of book value and earnings"," The International Journal of Accounting, Elsevier, vol. 41(1), pages 48-50.
    4. Filip, Andrei & Raffournier, Bernard, 2010. "The value relevance of earnings in a transition economy: The case of Romania," The International Journal of Accounting, Elsevier, vol. 45(1), pages 77-103, March.
    5. Lo, Gaye-Del & Marcelin, Isaac & Bassène, Théophile & Sène, Babacar, 2022. "The Russo-Ukrainian war and financial markets: the role of dependence on Russian commodities," Finance Research Letters, Elsevier, vol. 50(C).
    6. Zhang, Dayong & Hu, Min & Ji, Qiang, 2020. "Financial markets under the global pandemic of COVID-19," Finance Research Letters, Elsevier, vol. 36(C).
    7. Eleftherios Pechlivanidis & Dimitrios Ginoglou & Panagiotis Barmpoutis, 2022. "Debt crisis, age and value relevance of goodwill: evidence from Greece," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 30(2), pages 189-210, February.
    8. Lin Liao & Helen Kang & Richard D. Morris, 2021. "The value relevance of fair value and historical cost measurements during the financial crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 2069-2107, April.
    9. Luzi Hail, 2013. "Financial reporting and firm valuation: relevance lost or relevance regained?," Accounting and Business Research, Taylor & Francis Journals, vol. 43(4), pages 329-358, August.
    10. Dechow, Patricia M. & Kothari, S. P. & L. Watts, Ross, 1998. "The relation between earnings and cash flows," Journal of Accounting and Economics, Elsevier, vol. 25(2), pages 133-168, May.
    11. Guoping Liu & Jerry Sun, 2022. "The impact of COVID-19 pandemic on earnings management and the value relevance of earnings: US evidence," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 37(7), pages 850-868, February.
    12. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    13. Choi, Jong-Hag & Kim, Jeong-Bon & Lee, Jay Junghun, 2011. "Value relevance of discretionary accruals in the Asian financial crisis of 1997-1998," Journal of Accounting and Public Policy, Elsevier, vol. 30(2), pages 166-187, March.
    14. Ibrahim El-Sayed Ebaid, 2011. "The value relevance of accounting-based performance measures in emerging economies: The case of Egypt," Management Research Review, Emerald Group Publishing, vol. 35(1), pages 69-88, December.
    15. Sara Abdallah, 2019. "Earnings relevance changes post the Egyptian revolution crisis," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 17(1), pages 60-79, March.
    16. Albulescu, Claudiu Tiberiu, 2021. "COVID-19 and the United States financial markets’ volatility," Finance Research Letters, Elsevier, vol. 38(C).
    17. Collins, Daniel W. & Maydew, Edward L. & Weiss, Ira S., 1997. "Changes in the value-relevance of earnings and book values over the past forty years," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 39-67, December.
    18. Al-Hares, Osama M. & AbuGhazaleh, Naser M. & Haddad, Ayman E., 2012. "Value relevance of earnings, book value and dividends in an emerging capital market: Kuwait evidence," Global Finance Journal, Elsevier, vol. 23(3), pages 221-234.
    19. Marek Gruszczynski & Rafal Bilicz & Monika Kubik-Kwiatkowska & Aleksander Pernach, 2016. "Value relevance of companies' financial statements in Poland," KAE Working Papers 2016-014, Warsaw School of Economics, Collegium of Economic Analysis.
    20. Nicholas D Belesis & Christos G Kampouris & Alkiviadis Th Karagiorgos, 2022. "The Effect of COVID-19 on the Value Relevance of European Firms’ Financial Statements," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 14(1), pages 91-99.
    21. repec:eme:maj000:maj-05-2021-3149 is not listed on IDEAS
    22. Gregory D. Kane & Ryan D. Leece & Frederick M. Richardson & Uma Velury, 2015. "The Impact of Recession on the Value-relevance of Accounting Information," Australian Accounting Review, CPA Australia, vol. 25(2), pages 185-191, June.
    23. Hoffmann, Arvid O.I. & Post, Thomas & Pennings, Joost M.E., 2013. "Individual investor perceptions and behavior during the financial crisis," Journal of Banking & Finance, Elsevier, vol. 37(1), pages 60-74.
    24. Anubha Srivastava & Harjum Muharam, 2021. "Value relevance of earnings and book values during IFRS convergence period in India," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 19(5), pages 885-900, August.
    25. Alex Dontoh & Suresh Radhakrishnan & Joshua Ronen, 2004. "The Declining Value†relevance of Accounting Information and Non†Information†based Trading: An Empirical Analysis," Contemporary Accounting Research, John Wiley & Sons, vol. 21(4), pages 795-812, December.
    26. Lars Mion & Georgios Georgakopoulos & Petros Kalantonis & Nicolaos Eriotis, 2014. "The Value Relevance of Accounting Information in Times of Crisis: An Empirical Study," International Journal of Corporate Finance and Accounting (IJCFA), IGI Global, vol. 1(2), pages 44-67, July.
    27. Davis-Friday, Paquita Y. & Eng, Li Li & Liu, Chao-Shin, 2006. "The effects of the Asian crisis, corporate governance and accounting system on the valuation of book value and earnings," The International Journal of Accounting, Elsevier, vol. 41(1), pages 22-40.
    28. Dobija, Dorota & Klimczak, Karol Marek, 2010. "Development of accounting in Poland: Market efficiency and the value relevance of reported earnings," The International Journal of Accounting, Elsevier, vol. 45(3), pages 356-374, September.
    29. Tahat, Yasean A. & Alhadab, Mohammad, 2017. "Have accounting numbers lost their value relevance during the recent financial credit crisis?," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 182-191.
    30. Wessel M. Badenhorst & Petri H. Ferreira, 2016. "The Financial Crisis and the Value-relevance of Recognised Deferred Tax Assets," Australian Accounting Review, CPA Australia, vol. 26(3), pages 291-300, September.
    31. Khokan Bepari & Sheikh F. Rahman & Abu Taher Mollik, 2013. "Value relevance of earnings and cash flows during the global financial crisis," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 12(3), pages 226-251, August.
    32. Izzeldin, Marwan & Muradoğlu, Yaz Gülnur & Pappas, Vasileios & Petropoulou, Athina & Sivaprasad, Sheeja, 2023. "The impact of the Russian-Ukrainian war on global financial markets," International Review of Financial Analysis, Elsevier, vol. 87(C).
    33. Adwan, Sami & Alhaj-Ismail, Alaa & Girardone, Claudia, 2020. "Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 39(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maigoshi, Zaharaddeen Salisu & Latif, Rohaida Abdul & Kamardin, Hasnah, 2018. "Change in value-relevance of disclosed RPT across accounting regimes: Evidence from Malaysia," Research in International Business and Finance, Elsevier, vol. 44(C), pages 422-433.
    2. Carmen- Alexandra BALTARIU, 2015. "The Current State Of Knowledge In The Value Relevance Research Field," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 7, pages 13-20, April.
    3. Tswei, Keshin, 2013. "Is transaction price more value relevant compared to accounting information? An investigation of a time-series approach," Pacific-Basin Finance Journal, Elsevier, vol. 21(1), pages 1062-1078.
    4. Schaberl, Philipp D., 2016. "Beyond accounting and back: An empirical examination of the relative relevance of earnings and “other” information," Advances in accounting, Elsevier, vol. 35(C), pages 98-113.
    5. Alshehabi, Ahmad & Georgiou, George & Ala, Alessandro S., 2021. "Country-specific drivers of the value relevance of goodwill impairment losses," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 43(C).
    6. Hejer Khaldi & Feten Hamama, 2024. "Value Relevance of Accounting Information in Uncertain Economic Policy Context: Evidence from Tunisia," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 23(3), pages 570-595, September.
    7. Oliveira, Lídia & Rodrigues, Lúcia Lima & Craig, Russell, 2010. "Intangible assets and value relevance: Evidence from the Portuguese stock exchange," The British Accounting Review, Elsevier, vol. 42(4), pages 241-252.
    8. Eddie Chamisa & Musa Mangena & Hamutyinei Harvey Pamburai & Venancio Tauringana, 2018. "Financial reporting in hyperinflationary economies and the value relevance of accounting amounts: hard evidence from Zimbabwe," Review of Accounting Studies, Springer, vol. 23(4), pages 1241-1273, December.
    9. Iatridis, George & Dimitras, Augustinos I., 2013. "Financial crisis and accounting quality: Evidence from five European countries," Advances in accounting, Elsevier, vol. 29(1), pages 154-160.
    10. Zheng, Wenyuan & Li, Bingqing & Huang, Zhiyong & Chen, Lu, 2022. "Why Was There More Household Stock Market Participation During the COVID-19 Pandemic?," Finance Research Letters, Elsevier, vol. 46(PB).
    11. Lavinia Minodora Takacs, 2012. "The Value Relevance Of Earnings In A Transition Economy: Evidence From Romanian Stock Market," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-8.
    12. Dimitras, Augustinos I. & Kyriakou, Maria I. & Iatridis, George, 2015. "Financial crisis, GDP variation and earnings management in Europe," Research in International Business and Finance, Elsevier, vol. 34(C), pages 338-354.
    13. Persakis, Anthony & Iatridis, George Emmanuel, 2015. "Earnings quality under financial crisis: A global empirical investigation," Journal of Multinational Financial Management, Elsevier, vol. 30(C), pages 1-35.
    14. Melik Ertugrul & Volkan Demir, 2018. "How Does Unobserved Heterogeneity Affect Value Relevance?," Australian Accounting Review, CPA Australia, vol. 28(2), pages 288-301, June.
    15. Dhiaa Shamki, 2012. "Impact of Non Accounting Information on The Value Relevance of Accounting Information: The Case of Jordan," International Journal of Business and Social Research, LAR Center Press, vol. 2(1), pages 9-24, February.
    16. Aljughaiman, Abdullah A. & Nguyen, Tam Huy & Trinh, Vu Quang & Du, Anqi, 2023. "The Covid-19 outbreak, corporate financial distress and earnings management," International Review of Financial Analysis, Elsevier, vol. 88(C).
    17. Manganaris, Panayotis & Spathis, Charalambos & Dasilas, Apostolos, 2015. "The effects of mandatory IFRS adoption and conditional conservatism on European bank values," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 72-81.
    18. Adwan, Sami & Alhaj-Ismail, Alaa & Girardone, Claudia, 2020. "Fair value accounting and value relevance of equity book value and net income for European financial firms during the crisis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 39(C).
    19. Migliavacca, Alessandro, 2024. "Value relevance of accounting numbers and sustainability information in Europe: Empirical evidence from nonfinancial companies," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    20. Chishti, Muhammad Zubair & Khalid, Ali Awais & Sana, Moniba, 2023. "Conflict vs sustainability of global energy, agricultural and metal markets: A lesson from Ukraine-Russia war," Resources Policy, Elsevier, vol. 84(C).

    More about this item

    Keywords

    value relevance; COVID-19; war in Ukraine; economic crisis;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:foeste:v:24:y:2024:i:2:p:252-279:n:1013. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.