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Earnings Opacity, Stock Market Wealth Effect and Economic Growth

Ahmed Riahi‐Belkaoui (University of Illinois at Chicago, 601 South Morgan St. Chicago, IL 60607)

Review of Accounting and Finance

ISSN: 1475-7702

Article publication date: 1 January 2005

Abstract

This paper examines how accounting quality, as measured by earnings opacity, affects the stock market wealth effect, which in turn is shown to be linked to economic growth. Stock market wealth effect is negatively affected by earnings opacity. The data also indicate that the exogenous component of the stock market wealth effect — the component defined by earnings opacity‐ is positively associated with economic growth. The direct effect of earnings opacity on economic growth is, as expected negative, but insignificant.

Keywords

Citation

Riahi‐Belkaoui, A. (2005), "Earnings Opacity, Stock Market Wealth Effect and Economic Growth", Review of Accounting and Finance, Vol. 4 No. 1, pp. 72-91. https://doi.org/10.1108/eb043419

Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited