Who do you trust while bubbles grow and blow? A comparative analysis of the explanatory power of accounting and patent information for the market values of German firms

Fred Ramb, Markus Reitzig

    Research output: Working paperResearch

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    Abstract

    We present a theoretical and empirical analysis of the fitness of national German(German Commercial Code - Handelsgesetzbuch (HGB)) and international (IAS andUS-GAAP) accounting information, as well as European patent data to explain themarket values of German manufacturing firms. For the chosen volatile period from1997 to 2002, cautious national accounting information does not correlate with thefirms' residual market values (RMV). International accounting information makes nomeaningful contribution to explaining firms' RMV and seems to measure overinvestmentonly. Finally, patents counted at the individual country level correlate withthe firms' RMV.Keywords: Accounting standards, investor information, market value,patentsJEL-classifications: D82, M40, M41, K11
    Original languageEnglish
    Place of PublicationKøbenhavn
    Number of pages50
    Publication statusPublished - 2004

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