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2024 | OriginalPaper | Buchkapitel

5. Conservatism’s Role in the Italian Stock Market: Three Empirical Studies

verfasst von : Carlo D’Augusta

Erschienen in: Accounting Conservatism and the Stock Market

Verlag: Springer Nature Switzerland

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Abstract

This chapter presents three empirical studies on the relationship between conservatism and the Italian stock market. The first study examines alternative model specifications, comparing findings with U.S. market literature to enhance understanding of financial reporting practices in different markets. It also investigates how capital market pressures influence conservatism and evaluates firm-year-specific conservatism proxies in the Italian context. The second study analyzes conservatism’s impact on the Italian stock market during the Covid crisis, focusing on abnormal returns, daily return volatility, and abnormal trade patterns around and after the national lockdown. The third study examines whether Italian firms reduced conservatism during the post-Covid recovery, revealing that firms with strong capital market demands maintained conservative practices while others did not.

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Vorheriges Kapitel Conservatism and the Stock Market: Major Empirical Findings from Three Decades of Research

Nächstes Kapitel Concluding Remarks

The unprecedented level of uncertainty caused by the pandemic’s disruption of the economic activity arguably made it even harder for firms to produce reliable estimates of uncertain losses, such as impairments and write-downs (Quagli et al., 2021; Doni & Liberatore, 2021).

December 2019 for the vast majority of firms, earlier months (e.g., June) for the others.

The Italian government introduced several temporary exceptions to the measurement criteria required by national accounting principles (e.g., postponement of depreciation charges, asset revaluation, exceptions related to the going concern principle and the neutralization of losses), whose impact on financial statements raised perplexities (e.g., Quagli, 2020).

These concerns are not limited to the fiscal year 2020, as the ongoing conflict in Eastern Europe, as well as the protracted volatility in the financial markets, has led to a prolonged period of uncertainty as well as emergency countermeasures by the Italian government (Olante & Daniele, 2023).

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Titel: Conservatism’s Role in the Italian Stock Market: Three Empirical Studies
verfasst von: Carlo D’Augusta
Verlag: Springer Nature Switzerland
Buch: Accounting Conservatism and the Stock Market
Print ISBN: 978-3-031-67144-9

Electronic ISBN: 978-3-031-67145-6

Copyright-Jahr: 2024
DOI: https://doi.org/10.1007/978-3-031-67145-6_5