oa Journal of Economic and Financial Sciences - The value and accounting premium for South African-listed shares
|Article Title||The value and accounting premium for South African-listed shares|
|© Publisher:||University of Johannesburg|
|Journal||Journal of Economic and Financial Sciences|
|Affiliations||1 Georg-August-University, Germany, 2 University of Regensburg, Germany and 3 University of Regensburg, Germany|
|Publication Date||Oct 2008|
|Pages||187 - 202|
|Keyword(s)||Accounting premium, Asset pricing, Fama-French model, Multi-factor model, South Africa and Value premium|
In the last decade, empirical research has found strong evidence that value stocks provide higher returns than growth stocks (value premium). Firms with a high ratio of book value of equity to market value of equity are regarded as value stocks; a low ratio identifies growth stocks. Most research is tailored to the market in the United States of America. Only a few studies consider country-specific distinctions. This research analyses the value premium for the South African market and compares its magnitude to the findings for the US market. Moreover, the effects of the introduction of International Financial Reporting Standards (IFRS) for companies listed at the JSE Limited are examined. The adoption of IFRS is used to demonstrate that investors award an accounting premium for voluntary compliance with this new accounting standard.
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