Value relevance of impairment provisions in the Polish banking sector

Bolibok, Piotr

doi:10.15611/pn.2015.397.04

Cited by 2 publications

(2 citation statements)

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“…The efficiency of risk management appears therefore to be of crucial importance for equity investors in the Polish banking sector. As impairment provisions exerted strictly negative impact on charter values, it seems unlikely that they might be used for signaling purposes, which is in line with the findings of Ahmed et al (1999), Lim et al (2013), and Bolibok (2015).…”

Section: The Literature Reviewsupporting

confidence: 78%

An empirical evaluation of selected accounting-based value drivers in the Polish banking sector

Bolibok

2016

CJFA

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The paper aims at empirical evaluation of selected accounting-based value drivers in the Polish banking sector. Using the analyses of correlation and regression, the study investigates the associations between banks' charter values, proxied by Tobin's Q, and a set of explanatory variables including size, operating efficiency, profitability, net cash flow generation capacity, leverage, asset liquidity, and risk management efficiency, each proxied by a measure based on the data available in the annual financial reports of banks. The examined sample covered all domestically-based banks listed on the Warsaw Stock Exchange over the period 1997-2014. The empirical evidence indicates a statistically significant positive impact of operating efficiency, profitability and risk management efficiency on charter values. In turn, the influence of size and leverage, although also positive, appears to be so weak, that it becomes irrelevant when combined with other explanatory variables. Additionally, no statistically significant impact was found for net cash flow generation capacity nor asset liquidity. The above findings suggest that equity investors in the Polish banking sector perceive performance and risk management efficiency as the key value drivers, practically neglecting the issues related to banks' financial stability like the liquidity of assets or degree of leverage, thus presumably relying on the too-big-to-fail principle.

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Section: The Literature Reviewsupporting

confidence: 78%

An empirical evaluation of selected accounting-based value drivers in the Polish banking sector

Bolibok

2016

CJFA

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“…Bank managers might use the discretionary component to convey positive signals about the future cash flow prospects which, in turn, leads to its positive relationship with banks' market value. Although some studies provide evidence supporting the signaling hypothesis (e. g., [25]), the results of others are undermining it [26][27][28].…”

Section: Value Relevance Of Accounting Variables In the Banking Industrymentioning

confidence: 99%

The Impact of the Market Cycle on the Value Relevance of Book Values and Earnings in the Banking Industry: An Evidence From Poland

Bolibok¹

2018

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The paper aims at the empirical investigation of the impact of the market cycle on the value relevance of book values and earnings in the banking industry. unlike most prior studies, the paper directly examines the influence of cyclical fluctuations in investors' sentiments on the informativeness of these key accounting variables. Moreover, the study enhances the literature on the value relevance of banks' financial reporting by providing an empirical evidence from the emerging capital market of Poland. The examined sample covers all domestically-based commercial banks listed on the Warsaw Stock Exchange over the period 1997-2016. The empirical evidence based on the analyses of parametric and non-parametric correlation and regression indicates a significant impact of the market cycle on the value relevance of book values which markedly increases (decreases) in the periods of bull (bear) market. In contrast, the informativeness of earnings seems to be driven primarily by factors other than investors' sentiments. The results of the research indicate that the course of the market cycle is partially driving the fluctuations of the value relevance of book values of equity and net earnings in the Polish banking industry. There is a need for further investigation of the impact of market cycles on the value relevance of accounting data, not only in the context of the banking sector.

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Value relevance of impairment provisions in the Polish banking sector

Cited by 2 publications

References 11 publications

An empirical evaluation of selected accounting-based value drivers in the Polish banking sector

An empirical evaluation of selected accounting-based value drivers in the Polish banking sector

The Impact of the Market Cycle on the Value Relevance of Book Values and Earnings in the Banking Industry: An Evidence From Poland

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