Year 2017, Volume 12 , Issue 48, Pages 125 - 139 2017-07-28

An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey

Mehtap ÖNER [1] , Aslı AYBARS [2] , Hüseyin EKİZLER [3]


An extensive review of literature focusing on theoretical and analytical studies reveals that equity

markets will benefit from accounting conservatism due to the increase in overall information

quality. Conditional conservatism, which is evaluated as to the asymmetry between the impact of

good and bad news on earnings, is regarded to be a substitute of discretionary disclosure. Therefore,

as the firms increase the extent of their voluntary disclosures, the cost of raising capital is alleviated

since this cost depends on how much information is attained by the firms’ potential investors.

This study conducts a two stage analysis on a data set of nonfinancial firms listed on Borsa Istanbul

2005-2014, inclusive. Accordingly, the existence of conditional conservatism is tested by using

cross-sectional regression based on the asymmetric timeliness model developed by Basu (1997)

modified by Khan and Watts (2009). Consequently, the resulting firm-year measure of conditional

conservatism is used as the explanatory variable of the panel data analysis. The originality of the paper

stems from the fact that it attempts to provide evidence on the economic consequences of discretionary

accounting practices from Turkey in this specific strand of literature related to the equity

investors’ required rates of return.

Conditional Conservatism, Emerging Markets, Cost Of Equity Capital, Cross-Sectional Analysis
  • Zhang, J. (2008). The Contracting Benefits of Accounting Conservatism to Lenders and Borrowers, Journal of Accounting and Economics, 45.1, 27-54.
Subjects Social
Journal Section Eski Sayılar
Authors

Author: Mehtap ÖNER

Author: Aslı AYBARS

Author: Hüseyin EKİZLER

Dates

Publication Date : July 28, 2017

Bibtex @research article { maruoneri331582, journal = {Öneri Dergisi}, issn = {1300-0845}, eissn = {2147-5377}, address = {}, publisher = {Marmara University}, year = {2017}, volume = {12}, pages = {125 - 139}, doi = {10.14783/maruoneri.vi.331582}, title = {An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey}, key = {cite}, author = {Öner, Mehtap and Aybars, Aslı and Eki̇zler, Hüseyin} }
APA Öner, M , Aybars, A , Eki̇zler, H . (2017). An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey . Öneri Dergisi , 12 (48) , 125-139 . DOI: 10.14783/maruoneri.vi.331582
MLA Öner, M , Aybars, A , Eki̇zler, H . "An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey" . Öneri Dergisi 12 (2017 ): 125-139 <https://dergipark.org.tr/en/pub/maruoneri/issue/30728/331582>
Chicago Öner, M , Aybars, A , Eki̇zler, H . "An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey". Öneri Dergisi 12 (2017 ): 125-139
RIS TY - JOUR T1 - An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey AU - Mehtap Öner , Aslı Aybars , Hüseyin Eki̇zler Y1 - 2017 PY - 2017 N1 - doi: 10.14783/maruoneri.vi.331582 DO - 10.14783/maruoneri.vi.331582 T2 - Öneri Dergisi JF - Journal JO - JOR SP - 125 EP - 139 VL - 12 IS - 48 SN - 1300-0845-2147-5377 M3 - doi: 10.14783/maruoneri.vi.331582 UR - https://doi.org/10.14783/maruoneri.vi.331582 Y2 - 2017 ER -
EndNote %0 Öneri Dergisi An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey %A Mehtap Öner , Aslı Aybars , Hüseyin Eki̇zler %T An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey %D 2017 %J Öneri Dergisi %P 1300-0845-2147-5377 %V 12 %N 48 %R doi: 10.14783/maruoneri.vi.331582 %U 10.14783/maruoneri.vi.331582
ISNAD Öner, Mehtap , Aybars, Aslı , Eki̇zler, Hüseyin . "An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey". Öneri Dergisi 12 / 48 (July 2017): 125-139 . https://doi.org/10.14783/maruoneri.vi.331582
AMA Öner M , Aybars A , Eki̇zler H . An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey. Öneri Dergisi. 2017; 12(48): 125-139.
Vancouver Öner M , Aybars A , Eki̇zler H . An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey. Öneri Dergisi. 2017; 12(48): 125-139.
IEEE M. Öner , A. Aybars and H. Eki̇zler , "An Empirical Analysis On How Conservatism Influences Cost Of Equity Capital: Evidence From Turkey", Öneri Dergisi, vol. 12, no. 48, pp. 125-139, Jul. 2017, doi:10.14783/maruoneri.vi.331582