Influences on the Value Relevance of Equity and Net Income in the UK

Article Abstract:

Key Words: Valuation Models, JEL classification: M14, G14. In this paper the relationship between the market price of firms and their reported net income and equity values is investigated using a sample drawn from British commercial and industrial firms reporting during the years 1987-97. The underlying model is a simple version of the Edwards, Bell and Ohlson specification and this is found to produce realistic and robust results, but only if the specification control for the effect of negative values. The relative weight of the equity and net income coefficients vary across the short time span available with increasing emphasis on net income, the converse of Collins, Maydew and Weiss' (1997) findings for the US. They also vary in predictable ways with the characteristics of the firm - most notably size, dividend cover and return on equity. Leverage does not seem to play a significant role.

United Kingdom, Research, Finance

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Shariah and the evolution of property rights: special reference to South Asia

Article Abstract:

The stages in the development of the institution of private property in Islamic territories are analyzed within the framework of an evolutionary theory for South Asia. The analysis employs evolutionary approach that is useful in determining the influence of these institutions on the economic process and outcome. Using Commons' ideas and reasoning, modern day issues, such as tenurial rights, notion of public good, and the recognition and protection of economic value of property, are assessed.

Interpretation and construction, Economic aspects, History, South Asia, Right of property, Property rights, Islamic law

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