The Value Relevance of Financial Information Under the Influence of Country Risks. The Case of the Indian Listed Companies

In the decision-making process investors need quality financial information based on reported accounting numbers. Such numbers are present in financial statements and must meet a series of fundamental characteristics, such as relevance and faithful representation. The present paper aims to analyse a...

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Bibliographic Details
Published in:Review of economic and business studies 2016-12, Vol.9 (2), p.77-93
Main Authors: Robu, Ioan-Bogdan, Carp, Mihai, Istrate, Costel, Popescu, Cristian, Robu, Mihaela-Alina
Format: Article
Language:English
Subjects:
financial information
Indian capital markets
M41
O16
O53
risk country
value relevance
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Summary:In the decision-making process investors need quality financial information based on reported accounting numbers. Such numbers are present in financial statements and must meet a series of fundamental characteristics, such as relevance and faithful representation. The present paper aims to analyse and assess the value relevance of financial information on the financial market in India under the influence of the main country risk components (i.e. economic risk and freedom to set up businesses, corruption control, financial, fiscal, monetary and investment freedom). The research was carried out on a sample of companies listed on the regulated market in India between 2006 and 2014. The results of applying general linear models have shown that, over time, the country risk can have a significant influence on the value relevance of the financial statements reported at the financial market level.
ISSN:1843-763X
2068-7249
DOI:10.1515/rebs-2016-0035