Capital Market Information Research Articles

Capital Market Information and Industrial Performance: The Role of West German Banks

Journal Article Capital Market Information and Industrial Performance: The Role of West German Banks Get access John Cable John Cable University of Warwick and Loughborough University of Technology Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 95, Issue 377, 1 March 1985, Pages 118–132, https://doi.org/10.2307/2233472 Published: 01 March 1985

Market-Based Empirical Research in Accounting: A Review, Interpretation, and Extension

A decade and a half of the most concerted and ambitious effort in accounting history is evaluated here. It is the search into the relationship between publicly disclosed accounting information and the consequences of the use of this information by the major group of usersequity investors-as such consequences are reflected in characteristics of common stocks traded in major exchanges. This effort, known as market-based accounting research (MBAR), obtained its impetus from major developments in finance theory during the late 1950s and early 1960s. These were the portfolio selection theory and its offspring, the capital asset pricing model (CAPM); and the concept of informationally efficient capital markets (ECM). Subsequent developments in information economics, agency theory, and optimal incentive-signaling models were quickly incorporated into MBAR. While the impetus to this line of came from other disciplines, accounting was not only a beneficiary but also, to a modest extent, a benefactor. MBAR is relevant to the study of capital market efficiency, the CAPM, information economics, and regulation. This contribution distinguishes MBAR from most accounting areas, whose contributions to other disciplines are negligible. In

Information and institutions in the capital market

In the capital market information and institutions are logically coordinate concepts. The paper argues that it is impossible to derive a complete view of the role played by capital market institutions without constructing a theory of information, a theory of institutions, and a theory of how the two are related. Consideration is given to existing epistomological and methological approaches to information and institutions. On this basis a new approach is outlined and its relevance to accounting demonstrated by analysing one major problem currently facing the accounting profession.