The Quality and Information Content of Segment Reporting

Posted: 27 Feb 1998

See all articles by Dan Givoly

Dan Givoly

Pennsylvania State University, Smeal College of Business

Carla Hayn

University of California at Los Angeles - Anderson School of Management

Julia D'Souza

Cornell University - Department of Accounting

Abstract

This paper assesses the quality of segment reporting using a measure based on the correlation between the performance of the segment and its industry. The findings show that the quality of segment information particularly earnings is lower than that of stand-alone firms. The difference is attributed both to measurement errors as well as to the operational structure of multi-segment firms. The results also suggest that stock market considerations and political costs play a role in segment reporting. Market tests indicate that the information content of segment information is inversely related to its quality.

JEL Classification: M41

Suggested Citation

Givoly, Dan and Hayn, Carla and D'Souza, Julia M., The Quality and Information Content of Segment Reporting. Available at SSRN: https://ssrn.com/abstract=55439

Dan Givoly (Contact Author)

Pennsylvania State University, Smeal College of Business ( email )

305 Business Building
University Park, PA 16802
United States
814-865-0587 (Phone)
814-863-8393 (Fax)

Carla Hayn

University of California at Los Angeles - Anderson School of Management ( email )

D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-206-9225 (Phone)

Julia M. D'Souza

Cornell University - Department of Accounting ( email )

Ithaca, NY 14853
United States
607-255-2349 (Phone)
607-254-4590 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
2,823
PlumX Metrics