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Article: Heterogeneous investment opportunities in multiple-segment firms and the incremental value relevance of segment accounting data
Title | Heterogeneous investment opportunities in multiple-segment firms and the incremental value relevance of segment accounting data |
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Authors | |
Keywords | Divergence of profitability Incremental value relevance Segment growth opportunity Segment accounting data Real options |
Issue Date | 2003 |
Citation | Accounting Review, 2003, v. 78, n. 2, p. 397-428 How to Cite? |
Abstract | Applying a real-options-based valuation approach, we develop and test a model that addresses the incremental value relevance of segment data beyond firm-level accounting data. Prior studies (e.g., Zhang 2000; Biddle et al. 2001) show that equity valuation requires accounting data (in part) because accounting provides signals that guide capital investments underlying value creation. In this study, we establish that the usefulness of segment data beyond aggregate data relates to heterogeneity of investment opportunities across segments, caused by divergences of segment profitability and growth potential. Empirical results are consistent with the model's predictions. We also assess the magnitude of the valuation impact of segment information relative to that of firm-level information. |
Persistent Identifier | http://hdl.handle.net/10722/233759 |
ISSN | 2023 Impact Factor: 4.4 2023 SCImago Journal Rankings: 4.640 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chen, Peter F. | - |
dc.contributor.author | Zhang, Guochang | - |
dc.date.accessioned | 2016-09-27T07:21:34Z | - |
dc.date.available | 2016-09-27T07:21:34Z | - |
dc.date.issued | 2003 | - |
dc.identifier.citation | Accounting Review, 2003, v. 78, n. 2, p. 397-428 | - |
dc.identifier.issn | 0001-4826 | - |
dc.identifier.uri | http://hdl.handle.net/10722/233759 | - |
dc.description.abstract | Applying a real-options-based valuation approach, we develop and test a model that addresses the incremental value relevance of segment data beyond firm-level accounting data. Prior studies (e.g., Zhang 2000; Biddle et al. 2001) show that equity valuation requires accounting data (in part) because accounting provides signals that guide capital investments underlying value creation. In this study, we establish that the usefulness of segment data beyond aggregate data relates to heterogeneity of investment opportunities across segments, caused by divergences of segment profitability and growth potential. Empirical results are consistent with the model's predictions. We also assess the magnitude of the valuation impact of segment information relative to that of firm-level information. | - |
dc.language | eng | - |
dc.relation.ispartof | Accounting Review | - |
dc.subject | Divergence of profitability | - |
dc.subject | Incremental value relevance | - |
dc.subject | Segment growth opportunity | - |
dc.subject | Segment accounting data | - |
dc.subject | Real options | - |
dc.title | Heterogeneous investment opportunities in multiple-segment firms and the incremental value relevance of segment accounting data | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.scopus | eid_2-s2.0-0038401009 | - |
dc.identifier.volume | 78 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 397 | - |
dc.identifier.epage | 428 | - |
dc.identifier.isi | WOS:000182524200002 | - |
dc.identifier.issnl | 0001-4826 | - |