DocumentCode :
3451112
Title :
The Relative and Incremental Value Relevance of Nonfinancial Information
Author :
Hou Xiao-hong ; Xu Yu-Hong
Author_Institution :
Sch. of Manage., China Univ. of Min. & Technol., Xuzhou
fYear :
2008
fDate :
12-14 Oct. 2008
Firstpage :
1
Lastpage :
4
Abstract :
With the changes in the business environment, the ability of financial information to adequately reflect a firm´s value is increasingly being questioned. To overcome the shortcomings of the accounting-based performance systems, nonfinancial information is required to be added to the performance systems. Recent years, the changes in the performance measures from accounting-based to integrated performance systems have also occurred in China. Therefore, it is worth investigating the relationship of nonfinancial information and a company´s value based on the Chinese stock market. In the paper, the relative and incremental value relevance of nonfinancial information is investigated based on a sample of 648 listed companies who disclose R&D expenditures in Shanghai Stock Exchange from 2001 to 2006. R&D intensity is used as the proxy of nonfinancial information. It is found that: (1) Financial information is still value relevant; (2) R&D intensity is value relevant; (3) R&D intensity has incremental information over financial information. Our study is the first study on the incremental value relevance of R&D intensity in China. Regarding to the findings, we suggest that companies should spend more money on the R&D activities and disclose their R&D expenditures.
Keywords :
accounting; financial management; research and development management; stock markets; R&D expenditure; Shanghai stock exchange; accounting-based performance system; business environment; nonfinancial incremental value relevance information; Companies; Environmental management; Financial management; Research and development; Stock markets; Technological innovation; Testing; Time measurement;
fLanguage :
English
Publisher :
ieee
Conference_Titel :
Wireless Communications, Networking and Mobile Computing, 2008. WiCOM '08. 4th International Conference on
Conference_Location :
Dalian
Print_ISBN :
978-1-4244-2107-7
Electronic_ISBN :
978-1-4244-2108-4
Type :
conf
DOI :
10.1109/WiCom.2008.1426
Filename :
4679334
Link To Document :
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