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Systematic risk and accounting determinants: A new perspective from an emerging market

This study is to test the influences of basic accounting determinants on Indonesian manufacturing industry's systematic risk in the most-recent period, 2005-2007, in order to capture the latest market's perspectives and preferences. By using current ratio, debt to total asset ratio, Long-t...

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Main Authors: Aruna, Dian Citra, Warokka, Ari
Format: Article
Published: Inderscience Publishers 2013
Subjects:
HB Economic Theory
Online Access:http://repo.uum.edu.my/19127/
http://doi.org/10.1504/JGBA.2013.053476
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spelling my.uum.repo.191272016-11-10T03:45:56Z http://repo.uum.edu.my/19127/ Systematic risk and accounting determinants: A new perspective from an emerging market Aruna, Dian Citra Warokka, Ari HB Economic Theory This study is to test the influences of basic accounting determinants on Indonesian manufacturing industry's systematic risk in the most-recent period, 2005-2007, in order to capture the latest market's perspectives and preferences. By using current ratio, debt to total asset ratio, Long-term Debt to Total Asset (LDTA) ratio, firm size, and growth as the proxies for accounting determinants and beta as the proxy for systematic risk, we investigated 15 top and most-traded Indonesian manufacturing firms' stocks.The results revealed a striking and surprising phenomenon, which no accounting determinants influence at all the systematic risk.It demonstrated the market behaviour that paid less attention to the financial statement information, and seemed to focus more on technical analysis in making an investment decision.It implicitly highlighted on how to manage a market that seemingly is sensitive to non-fundamental factors, i.e., market sentiment and macroeconomic rumours, the main drivers of technical analysis. Inderscience Publishers 2013 Article PeerReviewed Aruna, Dian Citra and Warokka, Ari (2013) Systematic risk and accounting determinants: A new perspective from an emerging market. Journal for Global Business Advancement, 6 (1). pp. 24-37. ISSN 1746-966X http://doi.org/10.1504/JGBA.2013.053476 doi:10.1504/JGBA.2013.053476
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
topic HB Economic Theory
spellingShingle HB Economic Theory
Aruna, Dian Citra
Warokka, Ari
Systematic risk and accounting determinants: A new perspective from an emerging market
description This study is to test the influences of basic accounting determinants on Indonesian manufacturing industry's systematic risk in the most-recent period, 2005-2007, in order to capture the latest market's perspectives and preferences. By using current ratio, debt to total asset ratio, Long-term Debt to Total Asset (LDTA) ratio, firm size, and growth as the proxies for accounting determinants and beta as the proxy for systematic risk, we investigated 15 top and most-traded Indonesian manufacturing firms' stocks.The results revealed a striking and surprising phenomenon, which no accounting determinants influence at all the systematic risk.It demonstrated the market behaviour that paid less attention to the financial statement information, and seemed to focus more on technical analysis in making an investment decision.It implicitly highlighted on how to manage a market that seemingly is sensitive to non-fundamental factors, i.e., market sentiment and macroeconomic rumours, the main drivers of technical analysis.
format Article
author Aruna, Dian Citra
Warokka, Ari
author_facet Aruna, Dian Citra
Warokka, Ari
author_sort Aruna, Dian Citra
title Systematic risk and accounting determinants: A new perspective from an emerging market
title_short Systematic risk and accounting determinants: A new perspective from an emerging market
title_full Systematic risk and accounting determinants: A new perspective from an emerging market
title_fullStr Systematic risk and accounting determinants: A new perspective from an emerging market
title_full_unstemmed Systematic risk and accounting determinants: A new perspective from an emerging market
title_sort systematic risk and accounting determinants: a new perspective from an emerging market
publisher Inderscience Publishers
publishDate 2013
url http://repo.uum.edu.my/19127/
http://doi.org/10.1504/JGBA.2013.053476
_version_ 1644282624438435840
score 13.211869

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