| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 99 === This study is focused on examining the relation between corporate diversification and the value-relevance of financial statement. I separate corporate diversification into global diversification and industrial diversification and examines whether these two diversification differently affect the value-relevance of earnings and book value.
The empirical results show that the value-relevance of earnings is decreased and the value-relevance of book value of equity is increased when the degree of the firm’s global diversification is higher. This study also finds that the value-relevance of earnings is increased and the value-relevance of book value of equity is decreased when the degree of the firm’s industrial diversification is higher. These evidences suggest that higher global diversification of a company makes investors rely more on the book value of equity, and less on earnings, but higher diversification of a company makes investors rely more on the earnings, and less on book value of equity.
In addition, this study finds that when the higher global diversification is for the purpose of industrial development, the value-relevance decrease of earnings is alleviated. Finally, the evidences also show that the relation between global diversification and the value-relevance of financial statement is different in different industries.
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