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Value Relevance of Accounting and Other Variables in the Junior-Mining Sector

Authors: Casey Iddon (Federation University Australia, Ballarat, Victoria, Australia) , Samanthala Hettihewa (Federation University Australia, Ballarat, Victoria, Australia) , Christopher S. Wright (Higher Education Faculty, Holmes Institute, Victoria, Australia)

  • Value Relevance of Accounting and Other Variables in the Junior-Mining Sector

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    Value Relevance of Accounting and Other Variables in the Junior-Mining Sector

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Abstract

Unique fundamentals and severe uncertainty in the junior-mining-sector (JMS) make valuing JMS ventures problematic. However, potentially enormous returns draw many investors into the JMS. While financial-instrument-pricing theory suggests that accounting values/ratios should have little influence on JMS-firm outcomes, this study’s simple OLS and Panel-data findings show strong correlation between those variables and JMS-firm-share prices. After discounting market failure, it is conjectured that JMS nonfinancial factors, share prices and accounting values are co-determined in a simultaneous relationship that is obscurely linked to outcomes. The notions uncovered in this study should greatly interest academics and business sector participants.

Keywords: accounting information, firm valuation, junior mining sector, uncertainty

How to Cite:

Iddon, C., Hettihewa, S. & Wright, C. S., (2015) “Value Relevance of Accounting and Other Variables in the Junior-Mining Sector”, Australasian Accounting, Business and Finance Journal 9(1), 25-42. doi: https://doi.org/10.14453/aabfj.v9i1.3

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Published on
31 Mar 2015
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