Life Cycle Effect on the Value Relevance of Risk Measures and Performance Measures

Document Type : Original Article

Authors

1 Assistant Professor, Faculty of Management, Tehran University

2 M. A. Accounting , Faculty of Management, Tehran University

Abstract

The main goal of this paper is to investigatelife cycle effect on the value relevance of risk measures and performance measures. To test the research hypotheses, first, sample firms were classified into three life-cycle stages (Growth, Mature and Decline). Then, using regression models and Vuong's Z-statistic the hypotheses were tested. In this study, the financial data of 74 firms which are listed in Tehran’s Stock Exchange (TSE) for the period of 2001 to 2007 (518 firm-years) are tested. The results show that in different life cycle stages the value relevance of risk measures and performance measures and the incremental explanatory power of risk measures have significant difference. Moreover, the results of Vuong's Z-statistic show that in growth stage the incremental explanatory power of risk measures is significantly higher than other stages, and in mature stage the opposite is true.

Keywords

References

1. دهدار، فرهاد.(1386). طراحی و تبیین الگوهای برتر ارزشگذاری مبتنی بر عایدات حسابداری و جریان وجوه نقد در فرآیند چرخه عمر شرکت، رساله دکتری حسابداری، دانشگاه تربیت مدرس.
2.سازمان حسابرسی، کمیته فنی. (1386). " استاندارهای حسابداری ایران ". نشریه 160.
3. قربانی،آرش.(1385). " بررسی رابطه سود و جریان‌های نقدی با ارزش شرکت در چارچوب چرخهعمر شرکت "، پایان نامه کارشناسی ارشد،دانشگاه آزاد اسلامی واحد مشهد.
4.کردستانی،غلامرضا و حمید رود نشین. (1385)."بررسی میزان مربوط بودن اجزای نقدی و تعهدی سود حسابداری به ارزش شرکت "، بررسی‌های حسابداری و حسابرسی،ش 45،ص46.
5.Adizes, I.(1989).‘‘Corporate Life Cycle: How and Why Corporations Grow and Die and What Do about it’’, Englewood Cliffs, NJ.
6.Aharony , J. , H, Falk and N, Yehuda ,(2006).‘‘Corporate Life Cycle and the Value Relevance of Cash Flow Versus Accrual Financial Information’’, School of Economics and Management Bolzano ,Italy ,Working Paper No. 34.
7.Anthony, J. H. and Ramesh, K.(1992). ‘‘ Association between Accounting Performance Measures and Stock Prices: A Test of the Life Cycle Hypothesis ’’, Journal of Accounting and Economics, Vol.15, pp 203-27.
8.Black, E.L. (1998).‘‘ Life - Cycle Impacts on the Incremental Relevance of Earnings and Cash Flow Measures’’, Journal of FinancialStatement Analysis Fall, pp.40-56.
9.Jenkins, D.S., Kane, G.D. and Velury ,U. (2004). ‘‘The Impact of the Corporate Life Cycle on the Value Relevance of Disaggregated Earnings Components’’ Review of Accounting and Finance, Vol. 3,pp.5-20.
10.Kallunki, J.,Silvola ,H. (2008).‘‘The Effect of Organizational Life Cycle Stage on the Use of Activity Based Costing ’’, Management Accounting Research, Vol.19,pp. 62–79.
11.Shi ,C.(2003).‘‘On the Trade Off between the Future Benefits Riskiness of R&D: a Bondholders’ Perspective’’, Journal of Accounting and Economic ,Vol.35, pp.227-54.
12.Sugianis,T.(1996) ‘‘ The Value Relevancy of Research Development on Valuation of Future Earnings ’’, Journal of Accounting and Economic ,Vol.21 ,pp.128-142.
13.Vuong ,Quang H.(1989).‘‘Likelihood Ratio Tests for Mode Selection and Non-nested Hypotheses’’, Econometrical 57, pp.307-333.
14.Xu, Bixi.(2007).‘‘Life Cycle Effect on the Value Relevance of Common Risk Factor ’’, Review of Accounting and Finance Vol.6,pp.162-175.
 
Financial Accounting Research
Volume 2, Issue 3 - Serial Number 3
October 2010
Pages 49-64

Files

History

  • Receive Date: 14 June 2016
  • Revise Date: 11 July 2018
  • Accept Date: 14 June 2016

Share

How to cite

Statistics