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Do aggregate earnings components predict GDP growth better? An international setting comparison


Atmini, Sari and Sumiyana, Sumiyana (2017) Do aggregate earnings components predict GDP growth better? An international setting comparison. In: 17th Annual Conference of the Asian Academic Accounting Association (2016 FourA Conference), 20-22 November 2016, Kuching, Sarawak.

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Abstract

This study investigates the usefulness of aggregate accounting earnings and their components to predict GDP growth.This study shows evidence that net income, net operating income, other comprehensive income, and net income change at aggregate level could predict GDP growth. This study splits sample into developed and developing countries.Almost all of aggregate earnings components could predict GDP growth in developed countries.On the contrary, only other comprehensive income and net income growth could predict it in developing countries. Moreover, sensitivity analysis shows evidence that the predictive power of accounting numbers are more consistently found in developed countries. It implies that all economic activities of firms listed in developed countries’ stock exchanges fully reflect to that of macro economy. This reflection is better than those of in developing countries. We infer that the value relevance of accounting earnings and their disaggregation have reached not only in the capital markets but also in the national macroeconomy level.Indeed, this prediction seems dominantly to be accurate in developed countries only.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Published in SHS Web of Conferences 34; 2017; Organized by: Institute for Strategic and Sustainable Accounting Development (ISSAD), Tunku Puteri Intan Safinaz School of Accountancy (TISSA), Universiti Utara Malaysia (UUM)
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 23 Feb 2017 03:50
Last Modified: 23 Feb 2017 03:50
URI: http://repo.uum.edu.my/id/eprint/21029

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