Value Relevance of Accounting Information and the Moments of Bias Rate: Evidence From the IT Companies in FTSE Taiwan 50

Abstract

This study investigates the efficiency of value relevance and faithful representation when stock market price derivates from its firm value to the investigated IT companies listed in FTSE Taiwan 50. The empirical investigation reveals one financial indicators: Return on equity (ROE) has explanatory ability among seven financial indicators, earnings per share (EPS), book value (BV), dividend yield (Div.), price–earnings ratio (P/E), ROE, return on assets (ROA), and return on operating asset (ROOA) to both sampled companies, United Microelectronics Corporation, UMC, (2303) and Taiwan Semiconductor Manufacturing Company Limited, TSMC, (2330). Furthermore, the empirical results indicate that the higher order moments, skewness and kurtosis, of price deviation do not provide a reliable prediction or explanatory power for stock price trends.

Citation

Hsu, C.-C., Chia, K.-C. and Chang, Y.-C. (2024), "Value Relevance of Accounting Information and the Moments of Bias Rate: Evidence From the IT Companies in FTSE Taiwan 50", Lee, C.-F. and Yu, M.-T. (Ed.) Advances in Pacific Basin Business, Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 12), Emerald Publishing Limited, Leeds, pp. 351-367. https://doi.org/10.1108/S2514-465020240000012014