The impact of the global financial crisis on the value relevance of earnings in the Polish banking sector

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Published:
Sep 8, 2017
Issue
No. 119 (2017)
Section
Artykuły
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Piotr Bolibok
Department of Banking and Finance, The John Paul II Catholic University of Lublin
https://orcid.org/0000-0002-5649-181X

DOI: https://doi.org/10.22630/EIOGZ.2017.119.27
Keywords : banks, value relevance, earnings, global financial crisis
Abstract
The paper aims at empirical investigation of the impact of global financial crisis on the value relevance of earnings in the Polish banking sector. The examined sample covered all domestically-based banks listed on the Warsaw Stock Exchange over the period 2000–2015. The methodological framework of the study draws on the Ohlson model with multiple linear regression analysis. The results of the investigation are consistent with the findings of the majority of prior international studies and indicate that the value relevance of earnings decreased in the aftermath of the global financial crisis. This negative impact was most pronounced and statistically significant in the period directly succeeding the beginning of the crisis (2008–2012) and for separate earnings, whereas the results for consolidated ones are not unequivocal. This discrepancy suggests that the drop in the value relevance was largely attributable to the banking activity itself and refl ected, in particular, high volatility of impairment provisions on loan portfolios. In turn, more diversified composition of consolidated earnings mitigated the deterioration of their value relevance to the equity investors.

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How to Cite
Bolibok, P. (2017). The impact of the global financial crisis on the value relevance of earnings in the Polish banking sector. Zeszyty Naukowe SGGW - Ekonomika I Organizacja Gospodarki Żywnościowej, (119), 87–99. https://doi.org/10.22630/EIOGZ.2017.119.27
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