The value relevance of non-financial performance variables and accounting information: the case of the airline industry

Riley, Richard A.; Pearson, Timothy; Trompeter, Greg

doi:10.1016/s0278-4254(03)00021-8

Cited by 95 publications

(79 citation statements)

References 16 publications

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“…Chiung and Ming (2005), Ghosh and Wu (2006), Gonzales, Pradhan andMalsonado (2011), Al-Momani andAl-shboul (2013) shown that there is value relevance of non-financial information in relation to the predictability of firm failure, and it was related positively to company performance and financial performance. Riley, et al (2003) and Enalby, et al (2008) found that non-financial information is related positively to profit management. Meanwhile Wiersma (2008) concluded that non-financial performance does not have better value relevance compared with the company's financial performance.…”

Section: ⅰ Introductionmentioning

confidence: 98%

“…Chiung and Ming (2005) suggested that investment decisions affect market performance through stock price. Then, the stock price changes reflect changes in the rate of expected returns or the rate of potential risks (Riley, Pearson and Trompeter, 2003;Wiersma, 2008). Financial and non-financial information obtained from the company's annual report.…”

Section: ⅰ Introductionmentioning

confidence: 99%

“…A recent empirical study has shown empirical evidence of the value relevance of financial and no-financial information (Riley, et al 2003;Dontoh, Radhakrishnan and Ronen, 2004;Habib, 2004;Chiung and Ming, 2005;Ghosh and Wu, 2006;Enalby, Mohammad and Said, 2008;Wiersma, 2008;Gonzales, Pradhan and Malsonado, 2011;Al-Momani and Al-shboul, 2013). However, the result of recent studies evidence is inconsistent.…”

Section: ⅰ Introductionmentioning

confidence: 99%

“…However, the result of recent studies evidence is inconsistent. Some studies has shown that there is significant value relevance (Riley et al 2003;Chiung and Ming, 2005;Ghosh and Wu, 2006). Habib (2004) indicated that value relevance of financial information has negative relationship with earning management.…”

Section: ⅰ Introductionmentioning

confidence: 99%

“…Some studies have tried to examine the relevance of financial and non-financial information (Ghosh and Wu, 2012;Coram, et al, 2011;Jusoh, et al, 2008;Riley et al, 2003;Cardinaels and Dirks, 2010), however, their findings have not been conclusive, so that it generates a question of how the relevance of financial and non-financial information affect investment decision. Therefore, this problem remains the issue of interest to research.…”

Section: ⅰ Introductionmentioning

confidence: 99%

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Value Relevance of Financial and Non-Financial Information to Investor Decision

Honggowati¹

2015

Glob Bus Financ Rev

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The objective of this study is to examine the value relevance of financial and non-financial information to investor decision. Investors determine investment decisions from financial and non-financial information. In this research investor decision reflected on company's market performance, market performance is measured using Cumulative Abnormal Return (CAR). Financial information is measured using Return on Assets (ROA) and non-financial information using three components of Balanced Scorecard Method, which reflect, customer perspective, internal business process perspective, and learning and growth perspective. This study uses multiple regression to analyze the data of 121 manufacturing companies listed on Indonesia Stock Exchange (IDX) for the period 2010-2012. Sampling method in this research is conducted by the purposive sampling method. The findings show that the financial information which is measured by using the Return on Assets (ROA) was positively related to the market performance. On the other, from three components consist in non-financial information, customer perspective and internal busines and learning growth that has relation with market performance. Finally the results fully confirm the existence of a relationship between financial and non-financial information on market performance. Keywords: Cumulative Abnormal Return; Return on Assets; Customer Perspective; Internal Business Perspective; Learning andGrowth Perspective Ⅰ. IntroductionIn today's market, the changes in the business world from the industrial era into the information era are influenced by economic growth and technological advancement. Technological advancements can be used to obtain the information for the company to strengthen their market position. † Setianingtyas Honggowati Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia E-mail: setianingtyas_27@yahoo.co.id On the contrary, information of company's activities can be useful information to the other parties (e.g. regulators, competitors).Company's information was being able to effecting investor's and stakeholders decision-making processes. Chiung and Ming (2005) suggested that investment decision affect the company's market performance through stock price. Chiung and Ming (2005) suggested that investment decisions affect market performance through stock price. Then, the stock price changes reflect changes in the rate of expected returns or the rate of potential risks (Riley, Pearson and Trompeter, 2003;Wiersma,

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Section: ⅰ Introductionmentioning

confidence: 98%

Section: ⅰ Introductionmentioning

confidence: 99%

Section: ⅰ Introductionmentioning

confidence: 99%

Section: ⅰ Introductionmentioning

confidence: 99%

Section: ⅰ Introductionmentioning

confidence: 99%

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Value Relevance of Financial and Non-Financial Information to Investor Decision

Honggowati¹

2015

Glob Bus Financ Rev

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Bibliography

2013

Innovation Engineering: The Power of Intangible Networks

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Do effective and sustainable corporate governance mechanisms affect the relevance of non‐financial information?

Zampella,

Campanella,

Serino

et al. 2024

Corp Soc Responsibility Env

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The aim of this paper is to investigate the value relevance of non‐financial information (NFI) under the EU Directive 2014/95/EU, since its increasing importance over recent years. Adopting a panel data set with all listed firms in Germany, Spain, France and Italy, we obtain a final sample of 10,025 firms‐year‐observations in the period from 2017 to 2021. Through the lens of institutional theory, it emerges that firms adopt coercive, mimetic and normative pressure to be recognised by investors in their NFI practices. Furthermore, the presence of effective and sustainable corporate governance mechanisms improve accounting information (namely, Earnings Per Shares and Book Value of Equity Per Shares) and NFI. The contribution of this study is twofold. First of all, it enriches the literature about value relevance of NFI; second, it is beneficial for practitioners, such as investors, policy makers and regulators on the strategic levels of effective corporate governance mechanisms. NFI has a positive effect on capital market and improve investors' decision‐making by providing information on diversity, environmental matters, social and employees matters, human rights and anti‐corruption and bribery matters, which will favour the firms' implementation of more sustainable actions. Indeed, if investors recognise the importance of a certain firm's NFI, the market value of that firm will increase with consequent reputational and economic‐financial benefits. To the best of authors' knowledge, this is the first study that investigates the role of effective and sustainable corporate governance mechanisms on the value relevance of NFI.

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The value relevance of non-financial performance variables and accounting information: the case of the airline industry

Cited by 95 publications

References 16 publications

Value Relevance of Financial and Non-Financial Information to Investor Decision

Value Relevance of Financial and Non-Financial Information to Investor Decision

Bibliography

Do effective and sustainable corporate governance mechanisms affect the relevance of non‐financial information?

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