Accounting reform and value relevance of financial reporting from non-financial listed firms on the Vietnam stock market

Figures & data

Table 1. Summarising the R-squared or Adjusted R-square of price model

Countries	Time period	Authors	R^2 or Adjusted R^2
US	1953–1993	Collin et al. (1997)	54%
	1962–2014	M. E. Barth et al. (2018)	69.3%
Norway	1982–1996	King and Langli (1998)	64.6%
German	1982–1996	King and Langli (1998)	40.2%
England	1982–1996	King and Langli (1998)	66.2%
Australia	2001–2003	Habid and Azim (2008)	50% (Adj)
Korean	1987–1998	Bae and Jeong (2007)	35% (Adj)
	1988–1995	Graham and King (2000)	68.3%
Sri Lanka	2005–2009	Chandrapala (2013)	56% (Adj)
Czech	1994–1997	Katerina Hellström (2006)	63.7% (Adj)
	1998–2001	Katerina Hellström (2006)	72.9% (Adj)
Sweden	1994–1997	Katerina Hellström (2006)	88.5% (Adj)
	1998–2001	Katerina Hellström (2006)	73.8% (Adj)

Source: Authors’ collected data

Table 2. Industry classification

HOSE			HNX
Sector	Number of firms	Proportion	Sector	Number of firms	Proportion
Consumer Staples	35	8.7%	Transportation	24	7%
Consumer Discretionary	42	10.4%	Building	53	15.5%
Materials	67	16.6%	Agriculture	3	0.9%
Industrials	111	27.5%	Industrials	109	31.9%
Utilities	28	6.9%	Accommodation Service	43	12.6%
Real Estate	49	12.2%	Real Estate	17	5%
Health Care	13	3.2%	Health Care	8	2.3%
Information technology	4	1.0%	Information technology and Communication service	17	5%
Energy	11	2.7%	Mining and Oil	19	5.6%
Financial	39	9.7%	Financial	21	6.1%
Communication service	4	1.0%	Others	28	8.2%
Total	403		Total	342

Source: Authors collect data on hsx.vn and hnx.vn

Table 3. Sample selection

	Number of observations
Total	8,195 (745 firms)
Financial sectors	660 (60 firms)
Missing data	1,550
Selected data	5,985

Source: Author processes dataset

Table 4. Industry reclassification

	Number of observations	Proportion
Industrials	3,097	52%
Services	838	14%
Energy, mining and oil	569	10%
Agricultures	85	1%
Merchandising	730	12%
Real estate	666	11%
Total	5,985	100%

Source: Author processes dataset

Table 5. Descriptive statistics

Variable	N	Mean	SD	Min	Max
Pit	5,985	21478.4	23836.13	400	2,61,500
EPSit	5,985	2532.005	3361.586	−12648.66	78880.23
BVSit	5,985	18312.29	11150.47	−8302.179	444804.9

Source: Secondary data, Stata 14

Table 6. Pearson correlation (* significance at 0.1 level , ** significance at 0.05 levels, *** significance at 0.01 significance levels

	Pt3	EPS	BVS	Cash	Receiv	Finance	Inven	Nonca	liab
Pit	1.000
EPS	0.636***	1.000
BVS	0.459***	0.574***	1.000
Cash	0.346***	0.413***	0.498***	1.000
Receiv	0.033***	0.101***	0.232***	0.233***	1.000
Finance	0.276***	0.313***	0.407***	0.145***	0.048***	1.000
Inven	0.037***	0.085***	0.138***	0.199***	0.523***	−0.018	1.000
Nonca	0.040***	0.1483***	0.542***	0.214***	0.079***	0.044***	0.017	1.000
Liab	0.035***	0.146***	0.477***	0.373***	0.641***	0.129***	0.583***	0.711***	1.000

Source: Secondary data, Stata 14

Table 7. Result of regression test

	(1)	(2)	(3)	(4)	Robustness
Variable	Pit	Pit	Pit	Pit	Pit
EPS	3.935***	4.510***		3.723***	3.853***
	(.576)	(.550)		(.584)	(.560)
BVS	.302***		.983***		.305***
	(.101)		(.150)		(.101)
Cash				.703***
				(.124)
Receiv				.175***
				(.0376)
Finance				.480***
				(.0890)
Nonca				.259***
				(.0707)
Liab				−.235***
				(.0486)
Inven				.225***
				(.0636)
Constant	5,989***	10,058***	3,474	6,392***	5,781***
	(1,444)	(1,320)	(2,369)	(1,157)	(1,397)
No. of firms	685	685	685	685	685
Observations	5,985	5,985	5,985	5,985	5,985
Adj R-squared	.418	.404	.211	.436	.422

Notes: Heteroscedasticity and Autocorrelation in OLS were corrected by PCSE with corresponding t-statistics in parentheses; ***, **, and * represent significant levels at 1%, 5%, and 10%, respectively.

Source: Secondary data, Stata 14

Table 8. Result of regression test with positive earning firms and negative earning firms

	Positive earning		Negative earning
VARIABLES	Model 2	Model 3	Model 2	Model 3
EPS	4.765***		−0.332
	(0.581)		(4.766)
BVS		0.964***		0.882***
		(0.150)		(0.278)
Constant	8,978***	4,183***	7,903***	−1,236
	(1,503)	(2,398)	(1,174)	(2,537)
Observations	5,657	5,657	328	328
Adjusted R-squared	0.413	0.202	0.000	0.164

Note: Heteroscedasticity and Autocorrelation in OLS were corrected by PCSE with corresponding t-statistics in parentheses; ***, **, and * represent significant levels at 1%, 5%, and 10%, respectively.

Source: Secondary data, Stata

Table 9. Pooled and yearly cross-sectional regressions on earnings and book value (standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1)

Model 1	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
EPS	2.927***	1.978***	3.996***	4.274***	5.097***	4.871***	6.280***	5.991***	1.412***	4.310***	5.870***
	(0.236)	(0.187)	(0.275)	(0.270)	(0.236)	(0.256)	(0.327)	(0.389)	(0.196)	(0.224)	(0.319)
BVS	0.314***	0.475***	0.315***	0.481***	0.269***	0.631***	0.533***	−0.0398	0.823***	−0.140***	0.525***
	(0.0921)	(0.0818)	(0.102)	(0.0887)	(0.0703)	(0.0818)	(0.106)	(0.127)	(0.0835)	(0.0347)	(0.0999)
Const	3,378**	745.4	1,325	2,946**	3,303***	−1,644	−438.6	10,602***	3,779**	10,398***	4,756***
	(1,501)	(1,391)	(1,639)	(1,409)	(1,156)	(1,336)	(1,674)	(1,952)	(1,562)	(779.8)	(1,634)
N	397	433	461	481	502	548	574	627	656	664	642
R-squared	0.499	0.423	0.515	0.585	0.644	0.639	0.624	0.435	0.310	0.404	0.587
Model 2
EPS	3.456***	2.588***	4.554***	5.222***	5.636***	6.078***	7.380***	5.903***	2.377***	3.783***	6.996***
	(0.180)	(0.160)	(0.211)	(0.212)	(0.192)	(0.213)	(0.248)	(0.269)	(0.182)	(0.184)	(0.241)
Constant	7,431***	7,712***	5,784***	9,541***	6,849***	6,639***	6,317***	10,112***	16,239***	8,893***	12,024***
	(927.8)	(729.6)	(798.6)	(733.7)	(700.2)	(835.6)	(1,024)	(1,169)	(982.2)	(692.6)	(890.0)
N	397	433	461	481	502	548	574	627	656	664	642
R-squared	0.484	0.377	0.504	0.560	0.633	0.599	0.607	0.434	0.207	0.389	0.569
Model 3
BVS	1.068***	0.963***	1.276***	1.391***	1.175***	1.584***	1.889***	1.370***	1.123***	0.249***	1.762***
	(0.0816)	(0.0759)	(0.0928)	(0.0834)	(0.0783)	(0.0834)	(0.101)	(0.103)	(0.0751)	(0.0352)	(0.0914)
Constant	232.1	−2,299	−7,009***	−4,222**	−549.1	−6,223***	−8,691***	711.8	1,948	12,303***	−5,861***
	(1,743)	(1,526)	(1,852)	(1,646)	(1,587)	(1,694)	(2,075)	(2,163)	(1,600)	(965.1)	(1,891)
N	397	433	461	481	502	548	574	627	656	664	642
R-squared	0.302	0.272	0.292	0.368	0.311	0.398	0.380	0.220	0.255	0.071	0.367

Figure 1. The fluctuation of explanatory power adjusted R².

Table 10. Association between R² and time trend 2010–2020

VR	Coefficient	Std. Err.	t	P>|t|
Year	−0.0051909	.0110318	−0.47	.649
_cons.	0.5461455	.0748214	7.30	.000

Source: Secondary data, Stata 14

Table 11. Association between residual dispersion and time trend 2010–2020

Description of residual standard deviation
Year	2010		2011	2012	2013		2014		2015	2016	2017		2018	2019	2020
Residual standard deviation	11,601		10,884	13,578	12,284		11,360		13,868	18,724	23,437		20,648	14,484	18,478
VR = θ0 + θ1 *Yeart + εit
VR		Coef.				Std. Err.		t				P>t		95% Conf.
Year		906.0455				301.0422		3.01				0.015		225.0408
_cons		−1810286				606600.7		−2.98				0.015		−3182513

Source: Secondary data, Stata 14

Table 12. Impact of accounting reform on value relevance

Panel A: regression estimation model 4 of effects of regulatory reform
Variables	α 0		α 1	α 2	α 3		α 4	α 5
Coeff	1,794***		0.447***	3.25	6,350***		(0.198)***	1.062***
Observations	5,985
R-squared	0.433
Panel B: comparison of adjusted R^2
		Pre-reform				Post-reform
Total adjusted R^2		0.496				0.411
EPS- R^2		0.469				0.402
BVS- R^2		0.304				0.192

Source: Secondary data, Stata 14

Table 13. Difference of value relevance between small and large companies

	Model 1 Pit = β0 + β1BVSit + β2EPSit + εit		Model 2 Pit = a0 + a1 EPSit + εit		Model 3 Pit = b0 + b1 BVSit + εit
	Small	Large	Small	Large	Small	Large
EPS	1.59***	3.99***	2.63***	4.54***
BVS	0.68***	0.3***			1.15***	0.96***
R2	0.278	0.418	0.236	0.406	0.231	0.205
Adj R2	0.276	0.418	0.235	0.406	0.230	0.205
N	552	5,433	552	5,433	552	5,433

Note: Heteroscedasticity and Autocorrelation in OLS were corrected by PCSE with corresponding t-statistics in parentheses; ***, **, and * represent significant level at 1%, 5%, and 10%, respectively.

Source: Secondary data, Stata 14

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