Ownership structure and informativeness of the accounting earnings

Abstract

The present work analyzes the relationship between the ownership structure of listed nonfinancial Spanish companies and the informativeness of their accounting earnings, measured by the earnings-return relationship. We document that the informativeness of earnings decreases with the level of an ultimate owner's voting control. Nevertheless, we did not find statistically significant results concerning the relationship between the informativeness of accounting earnings and the extent to which the owner's voting rights exceed his cash flow rights. Our results are generally robust to controls for firm size, growth opportunities, leverage, and to the inclusion of only those companies with an ultimate owner. Copyright © 2001 asociación española de contabilidad y administración de empresas.