Abstract
This paper investigates the value-relevance of group-affiliated companies using a sample of Chinese private listed companies. We find that the value-relevance of earnings for the affiliated companies is negatively related to the relative strength of the business groups, and a higher operating risk of the affiliated companies may weaken the negative relationship. Moreover, a stronger relative strength of the business groups may reduce the likelihood of the affiliated companies’ future stock price crashes. Overall, our results suggest that low value-relevance of earnings for group-affiliated companies may not be indicative of low accounting information quality.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
