TRANSPARENCY AND VALUE RELEVANCE: THE EXPERIENCE

TRANSPARENCY AND VALUE RELEVANCE: THE EXPERIENCE
OF SOME MENA COUNTRIES
Iftekhar Hasan*
Professor of Finance
Lally School Management
Rensselaer Polytechnic Institute
Troy, New York 12180
hasan@rpi.edu
518 276-2525; 518 276-8661
Asokan Anandarajan
Associate Professor of Accounting
New Jersey Institute of Technology
And Graduate Faculty
Rutgers University
Newark, NJ 07102
973 596-8568
Preliminary Version,
Please Do not Quote
October 2003
* Corresponding author.

TRANSPARENCY AND VALUE RELEVANCE: THE EXPERIENCE OF SOME
MENA COUNTRIES

ABSTRACT

Studies examining what factors influence relevance of reported numbers in financial
statements is becoming increasingly important in the accounting and finance literature.
This is an important area for regulators in particular. An understanding of what factors
contribute to or detract from value relevance of accounting numbers is essential in the
light of globalization that has resulted in internationalization of accounting practices.
This study contributes to the extant literature by examining value relevance for both
financial and non-financial institutions in the Middle East. We examine country specific,
and institution specific characteristics. Our study shows that, with respect to country
specific characteristics, differences in mandated accounting disclosures, source of
accounting regulation (private sector versus government) type of legal environment,
extent of foreign competition, and extent of competition influences value relevance. With
respect to firm specific characteristics, size of firm and extent of multinational activity
contributed to differences in value relevance.
Keywords: Value Relevance, Equity Valuation, Earnings, Book Values,
Middle East and North Africa

WWW.SSRN.COM