Capital Market
Journal of Accounting and Economics 31 (2001) 105–231
Capital markets research in accounting$
S.P. Kothari*
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA 02142, USA Received 22 November 1999; received in revised form 8 March 2001
Abstract I review empirical research on the relation between capital markets and financial statements. The principal sources of demand for capital markets research in accounting are fundamental analysis and valuation, tests of market efficiency, and the role of accounting numbers in contracts and the political process. The capital markets research topics of current interest to researchers include tests of market efficiency with respect to accounting information, fundamental analysis, and value relevance of financial reporting. Evidence from research on these topics is likely to be helpful in capital market investment decisions, accounting standard setting, and corporate financial disclosure decisions. r 2001 Elsevier Science B.V. All rights reserved.
JEL classification: F00; F30; G15; M41 Keywords: Capital markets; Financial reporting; Fundamental analysis; Valuation; Market efficiency
$ I thank Jeff Abarbanell, Anwer Ahmed, Sudipta Basu, Patty Dechow, Dan Gode, Wayne Guay, Charles Lee, Bob Lipe, Mike Mikhail, Jowell Sabino, Jake Thomas, Charles Wasley, and Tzachi Zach for helpful comments and discussions. I am especially indebted to Doug Skinner and Jerry Zimmerman, editors, for detailed comments on several drafts of the paper. I acknowledge financial support from the New Economy Value Research Lab at the MIT Sloan School of Management.
*Tel.: +1-617-253-0994; fax: +1-617-253-0603. E-mail address: kothari@mit.edu (S.P. Kothari). 0165-4101/01/$ - see front matter r 2001 Elsevier Science B.V. All rights reserved. PII: S 0 1 6 5 - 4 1 0 1 ( 0 1 ) 0 0 0 3 0 - 1
106
S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231
1. Introduction 1.1. Objective of the review article My
Capital markets research in accounting$
S.P. Kothari*
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA 02142, USA Received 22 November 1999; received in revised form 8 March 2001
Abstract I review empirical research on the relation between capital markets and financial statements. The principal sources of demand for capital markets research in accounting are fundamental analysis and valuation, tests of market efficiency, and the role of accounting numbers in contracts and the political process. The capital markets research topics of current interest to researchers include tests of market efficiency with respect to accounting information, fundamental analysis, and value relevance of financial reporting. Evidence from research on these topics is likely to be helpful in capital market investment decisions, accounting standard setting, and corporate financial disclosure decisions. r 2001 Elsevier Science B.V. All rights reserved.
JEL classification: F00; F30; G15; M41 Keywords: Capital markets; Financial reporting; Fundamental analysis; Valuation; Market efficiency
$ I thank Jeff Abarbanell, Anwer Ahmed, Sudipta Basu, Patty Dechow, Dan Gode, Wayne Guay, Charles Lee, Bob Lipe, Mike Mikhail, Jowell Sabino, Jake Thomas, Charles Wasley, and Tzachi Zach for helpful comments and discussions. I am especially indebted to Doug Skinner and Jerry Zimmerman, editors, for detailed comments on several drafts of the paper. I acknowledge financial support from the New Economy Value Research Lab at the MIT Sloan School of Management.
*Tel.: +1-617-253-0994; fax: +1-617-253-0603. E-mail address: kothari@mit.edu (S.P. Kothari). 0165-4101/01/$ - see front matter r 2001 Elsevier Science B.V. All rights reserved. PII: S 0 1 6 5 - 4 1 0 1 ( 0 1 ) 0 0 0 3 0 - 1
106
S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231
1. Introduction 1.1. Objective of the review article My
References: S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 211 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 213 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 215 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 217 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 219 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 221 S.P. Kothari / Journal of Accounting and Economics 31 (2001) 105–231 223