The impact of accounting information (earnings and book values) on share prices: an emerging market perspective - the case of the Ghanaian capital market

Mbawuni, Joseph (2008) The impact of accounting information (earnings and book values) on share prices: an emerging market perspective - the case of the Ghanaian capital market. Doctoral thesis, Birmingham City University.

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Abstract

The relation between capital markets and accounting information (specifically accounting earnings and book values) is the subject of this study. The review of the relevance literature shows that capital markets-based accounting research has revealed that accounting information plays a significant role for both investors and analysts. The study investigates the impact of accounting information on share prices using the data of listed companies in the Ghana Stock Exchange (GSE) collected from various sources covering a period of thirteen years from 1991 to 2003.

In this study there are four areas of research that are searched successively: 1) The study integrates an analytical framework with a synthesis of secondary financial and statistical data in examining the institutional development and performance of the Ghanaian Stock Market; 2) Secondly, it uses the Price Behaviour Model to analyze the impact of announcement of accounting information on share prices in emerging markets using the Ghana Stock Market as a case study. 3) In the third section, the Ohlson (1995) Valuation Model is applied to establish the information content of accounting earnings and book values for share prices.

Conclusions drawn from this research are summarised as follows: 1) The empirical results supports the hypothesis that the publication/announcement of accounting information has an effect on share prices in the Ghana stock market; 2) earnings and book values jointly and individually are positively and significantly related to share prices; 3) the incremental information content of earnings is greater than that of book values; 4) earnings for profit firms add more to the overall explanatory of the valuation model than book values. These conclusions could be generalised to other emerging capital markets.

Evidence from the analysis clearly reports a significant decrease in share price volatility in the post-announcement period relative to pre-announcement period. This research has also confirmed that reported accounting information in the Ghanaian capital market are relevant in equity valuation and are generally consistent with the results obtained from other advanced capital markets.

Item Type: Thesis (Doctoral)
Uncontrolled Keywords: Accounting, share prices, stock exchanges, stock markets
Subjects: N100 Business studies
N300 Finance
N400 Accounting
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Dept. Accountancy and Finance
UoA Collections > PhD Theses Collection
Depositing User: Carrie-Anne Bryan
Date Deposited: 06 Feb 2017 14:49
Last Modified: 06 Feb 2017 14:49
URI: http://www.open-access.bcu.ac.uk/id/eprint/3860

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