Statistical Studies of Financial Reports and Stock Markets

Journal of Capital Markets Studies, Vol. 1 Issue: 1, pp.5-9, doi: 10.1108/JCMS-10-2017-006

6 Pages Posted: 12 Dec 2017

See all articles by Shyam Sunder

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Multiple version iconThere are 2 versions of this paper

Date Written: July 17, 2017

Abstract

Purpose – The purpose of this paper is to examine the usefulness of statistical studies of financial reports and stock market data for improving corporate financial reports.

Design/methodology/approach – Analytical writing.

Findings – It is often claimed that statistical studies of co-variation between financial and stock market data can help set better financial reporting policy. Such co-variation, even when it can be estimated, tells us little about which financial reports help to make better financial decisions. A case in support of such claims remains to be made.

Practical implications – The readers are advised to be extremely careful in drawing inferences from studies of co-variation between accounting and stock market data for financial reporting policy.

Social implications – Inference from accounting empirical studies to policy needs better rationale to avoid bad policy consequences.

Originality/value – This paper raises original questions about policy inferences from a large class of empirical research in accounting.

Keywords: Efficient markets, Financial reporting policy, Statistical co-variation

JEL Classification: M41

Suggested Citation

Sunder, Shyam, Statistical Studies of Financial Reports and Stock Markets (July 17, 2017). Journal of Capital Markets Studies, Vol. 1 Issue: 1, pp.5-9, doi: 10.1108/JCMS-10-2017-006. Available at SSRN: https://ssrn.com/abstract=3082489

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6160 (Phone)

HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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