Supply and Demand of Information for Firm Valuation
29 Pages Posted: 6 Sep 2019
Date Written: August 2019
The concept that accounting represents the information economics of the firm is a premise for the allocation of scarce resources. The analysis starts with a clean surplus model as a basis for the conceptual framework. Then theoretical firm information economic supply-and-demand features are incorporated within a path diagram. This framework is investigated empirically with simultaneous regression equations and a structural equation model (SEM). Equations have explanatory power. And, a latent variable measure of internally generated intangible assets positively and significantly affects net income. Thus, the study expands the research frontier for SEM financial accounting research.
Keywords: Information Economics, SEM, Intangible Assets
JEL Classification: C5, G12, M00
Suggested Citation: Suggested Citation