• East Asian Journal of Business Economics (EAJBE)
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• v.12 no.2
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• pp.1-7
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• 2024

Purpose: This study delves into the application of the Ohlson 1995 valuation model, particularly addressing the intricacies of the "Other information" variable. Our goal is to pinpoint the most suitable variables for substitution within this category, focusing specifically on the Mongolian Stock Exchange (MSE) context. Research design, data, and methodology: Employing data spanning from 2012 to 2022 from 60 MSE-listed companies, we conduct a comprehensive analysis encompassing both financial and non-financial indicators. Through meticulous examination, we aim to identify which variables effectively substitute for the "Other information" component of the Ohlson model. Results: Our findings reveal significant outcomes. While all financial variables within the model exhibit importance, certain non-financial indicators, notably the company's level and state ownership participation, emerge as particularly influential in determining stock prices on the MSE. Conclusions: This study not only contributes to a deeper understanding of valuation dynamics within the MSE but also provides actionable insights for future research endeavors. By refining key variables within the Ohlson model, this research enhances the accuracy and efficacy of financial analysis practices. Moreover, the implications extend to practitioners, offering valuable insights into the determinants of stock prices in the MSE and guiding strategic decision-making processes.

• Journal of Digital Convergence
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• v.11 no.5
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• pp.145-158
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• 2013

I estimate stock prices of listed companies using financial information and Ohlson model, which is used for the evaluation of company value. Furthermore, I use the artificial neural network, one of artificial intelligence systems, which are not based on linear relationship between variables, to estimate stock prices of listed companies. By reapplying this in estimating stock prices of newly listed companies, I evaluate the appropriateness in stock valuation with such methods. The result of practical analysis of this study is as follows. On the top of that, the multiplier for the actual stock price is accounted by generating the estimated stock prices based on the artificial neural network model. As a result of the comparison of two multipliers, the estimated stock prices by the artificial neural network model does not show statistically difference with the actual stock prices. Given that, the estimated stock price with artificial neural network is close to the actual stock prices rather than the estimated stock prices with Ohlson model.

• Management & Information Systems Review
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• v.25
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• pp.203-222
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• 2008

This thesis examines whether accounting information-earnings and book values-has the value relevance in the KOSDAQ. The study is motivated by previous studies which have examined the value relevance of accounting information. Prior researches have focused on KSE(Korea Stock Exchange). But, prior researches have not examined the value relevance of accounting information in KOSDAQ. So, this study examined the value relevance of accounting information which is disclosed by firms on KOSDAQ and whether accounting information between firms on KOSDAQ and KSE has the discriminative value relevance, underlying the expectation that KOSDAQ firms will have higher future profitability than KSE firms. In other words, book-value multiples of KOSDAQ firms is higher than book-value multiples of KSE firms and earnings multiples of KOSDAQ firms is lower than earnings multiples of KSE firms. The value relevance of accounting information is examined by a valuation framework presented by Ohlson(1995), which expresses the stock-price as a function of both earnings and book values of equity. The results indicate that accounting information of KOSDAQ has significant explanatory power for stock price over the 2005-2007 period. KOSDAQ firm are divided by Venture firms and Small to Mid size firms. KOSDAQ Venture firms have the discriminative value relevance, compared with KSE firms. But, KOSDAQ Small to Mid size firms have not the discriminative value relevance, compared with KSE firms.

• Journal of Information Technology Services
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• v.8 no.3
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• pp.67-81
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• 2009

This study aims to test the valur relevance of development cost particularly focusing on IT firms of KOSDAQ. Test period is from 2005 to 2007 and the samples are 2,271 year-firms including 1,692 firms that reported development cost in financial statements. The basic test model is a modified Ohlson(1995)'s linear model. The empirical results show that there is the negative relation between stock price and development cost reported as asset. It means that development costs reported as asset is considered as expense in the market. It implies that development activities of KOSDAQ IT firms is not related to market-leading technologies or goods. Otherwise it might reflect the conservative valuation of market on the unstability of KOSDAQ market itself.

• Management & Information Systems Review
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• v.28 no.1
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• pp.71-97
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• 2009

In this study, I compare the ability of alternative accounting method for employee stock option to reflect firm value using the Ohlson's(1995) valuation model for 200 firms. The each methods, I compare are employee stock option expense recognition based on the K-GAAP disclosures, and asset recognition at the grant date based on the SFAS No. 123 Exposure Draft: Accounting for stock-based compensation. The model include: (1) a model that uses reported earnings, equity book value, and compensation expense based on the K-GAAP disclosures; (2) a model that uses pro-forma earnings, equity book value and adds a measure of the unrecognized asset arising form granting of employee stock options. Finding form estimating equations that the K-GAAP method for calculating compensation has no explanatory power, and the SFAS No.123 Draft Exposure method for arising asset and fair value compensation better captures than market's perception of the economic impact of stock options on firm values. However, the correlation of employee stock option compensation expense is positive. These results suggest that incentive benefits derived from employee stock option plans outweigh the cost associated with plan. In addition, I couldn't find evidence that company in KOSDAQ that have high growth potential benefit more from employee stock option plan compared to lager, more mature firm in SEC.

• Journal of Distribution Science
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• v.17 no.1
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• pp.89-94
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• 2019

Purpose - In recent digital information society, the most important factor of to increase the firm value of the distribution company is not the activity to increase the sales through the general advertisement of the unspecified majority by purchasing the finished product, but to grasp the needs of the consumers and to develop a new distribution platform that connects producers and consumers directly through consumer-tailored advertisements centering on e-commerce. Therefore each company in the distribution industry is spending a lot on research and development investment to innovate the distribution technology and distribution system, and the research and development investment expenditures can affect firm value. The purpose of this study is to analyze the impact of research and development investment expenditures in the distribution industry on market value of the firm. Research design, data, and methodology - As a research method, the sample firms are those which are listed on korea stock exchange market from 2011 to 2017 and the research model is Ohlson(1995) model, which is a representative valuation model using accounting information. This study analyzes the effect of distribution company's research and development investment expenditures and advertising expenditures on market value of the firm Results - The results of empirical analysis show that research and development investment expenditures for developing new distribution technology and advertising expenditures for promoting sales in the distribution company are all positively related to the market value of firm. Therefore, in describing market value of the distribution company, it is shown that the research and development investment expenditures and advertising expenditures together with the net asset and net profit are the important accounting information that explains the market value of firm. This result show that investment expenditures on research and development for the innovation of distribution technology of distribution company creates intangible intellectual assets and increases market value of the firm. Conclusions - The result of this study shows that research and development investment expenditures for the new distribution technology as well as the spending for the advertisement in the future is a very important investment expenditures that can increase the market value of the distribution company.

• Asia-Pacific Journal of Business
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• v.14 no.4
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• pp.233-254
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• 2023

Purpose - This study aims to verify whether the effect of tax avoidance on corporate value is non-linear in the Korean financial markets. Design/methodology/approach - This study believes that the cause of the inconsistent empirical analysis results of previous studies that verified the relationship between tax avoidance and firm value may be an error in assuming linearity, and verifies whether a nonlinear relationship exists. The sample company in this study is a December settlement corporation listed on the Korean stock market, and the analysis period is from 2000 to 2021. In the empirical analysis model, Tobin's Q is used as a proxy for corporate value, tax avoidance is used as the main independent variable, and a regression model is designed with corporate size, growth rate, and debt ratio set as control variables. Findings - As a result of the empirical analysis, it can be confirmed that there is an inverted U-shaped nonlinear relationship between tax avoidance and corporate value. In the additional analysis using Ohlson (1995) firm valuation model for the robustness of the results of the empirical analysis, the same nonlinear value relationship between tax avoidance can be confirmed. Research implications or Originality - This study is considered to be meaningful in that it verifies the non-linear relationship of tax avoidance, which has not been attempted in previous studies. The meaning of the inverted U-shaped nonlinear relationship presented in this study is that corporate tax avoidance acts as a factor that increases corporate value up to a certain level, but rather becomes a factor that decreases corporate value when it exceeds a critical point. These results are expected to provide new perspectives and perspectives on tax avoidance to companies belonging to the Korean capital market.

• Journal of Distribution Science
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• v.16 no.2
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• pp.83-88
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• 2018

Purpose - For distribution corporate, the method of recognizing sales revenue may be different depending on the type of distribution transaction. Until the change in accounting standards for revenue recognition was made in 2002, the distribution corporate recognized the full amount of sales of goods regardless of the type of transaction. However, in accordance with accounting standards for revenue recognition, which began to be applied in 2003, distribution corporate differ in sales revenue recognition by transaction type. The Purpose of this study is to analyze the impact of sales revenue on the corporate value after the change of the revenue recognition accounting standards. Research design, data, and methodology - We selected a comprehensive wholesale and retail corporate listed on Korea Exchange. The research model extends the Ohlson(1995) model and regresses whether sales revenue affecting the corporate value is discriminatory value relevance between the corporate affected by changes in accounting standards for revenue recognition and those not. Results - The results of the analysis are as follows. First, The average value of stock price, net asset per share, and earnings per share are all higher than those before the change of accounting standards for revenue recognition. However, the average value of sales per share is lower than that before the change of accounting standards for revenue recognition. Second, the relationship between corporate value and net asset per share, earnings per share and sales per share, the coefficient of net asset per share, earnings per share and sales per share are all statistically significant positive value. Therefore, in explaining corporate value, besides net asset per share and earnings per share, sales per share provides additional information. And the coefficient of interaction variable between accounting standard change and sales per share is a statistically significant positive value. This result indicating that after the change of the revenue recognition accounting standards the usefulness of sales revenue has increased. Conclusions - The change in accounting standards for revenue recognition led to a decrease in distribution corporate sales revenue but the higher the relevance of the corporate value of the sales revenue information. These results shows that the change of accounting standards that reflects the transaction type of retailers was a revision to increase the value relevance of sales revenue in valuation of corporate value.