Impact of market segmentation on value-relevance of accounting information: evidence from China
Journal
Asia-Pacific Journal of Accounting & Economics
Journal Volume
19
Journal Issue
1
Pages
82-96
Date Issued
2012
Author(s)
Abstract
This study examines how the market segmentation policy in China affected value-relevance of accounting information. We find that the price difference between A- and B-shares significantly decreased after the market segmentation policy was diminished in 2001. We also find that the association between A-share price and accounting information increased after 2002. Although the association between share price and accounting information became much weaker for B-shares during the transition period of 2000–2002, this association also increased after 2002. This study provides evidence on how market condition and information environment affect the association between share price and accounting information in China.
Type
journal article