Value Relevance of Accounting Information of Stock Returns with the Moderating Role of Firm’s Ownership Structure: A Case Study of Initial Public Offerings in Pakistan


  • Zeshan Jalil Ghazi PHD Scholar, Institute of Business Administration, Khwaja Fareed University of Engineering and Information Technology (KUEIT), Rahim Yar Khan, Pakistan Author
  • Dr. Waleed Khalid Assistant Professor, Institute of Business Administration, KFUEIT, Rahim Yar Khan, Pakistan Author
  • Dr. Abdul Rasheed Assistant Professor, Institute of Business Administration, KFUEIT, Rahim Yar Khan, Pakistan Author



Accounting Information, Initial Public Offerings, Ownership Structure, Stock Returns


This study investigates the effect of VRAI on stock returns moderating the role of ownership structure between accounting information variables and stock returns. The study used the data of 92 firms conducting initial public offerings (IPOs) registered on the Pakistan Stock Exchange from 2000 to 2022. The study found that EPS, CEPS and book value are positive and significant factors in the stock returns of firms during IPOs. However, the study found that the influence of variables NI, CNI and DPS on SR is positive but statistically insignificant. Similarly, the study also found that ownership structure is positively and significantly related to stock returns during IPOs. The moderation analysis shows that the ownership structure significantly moderates the relationship between EPS and stock returns, CEPS and stock returns and BV and stock returns. Keeping in view the study outcomes, it is concluded that accounting information variables are key to influencing the stock returns of firms during IPOs. Similarly, ownership structure plays an imperative role in moderating the relationship between accounting information variables and stock returns during firms conducting initial public offerings.


Alswalmeh, A. A. A., Dali, N. R. S. B. M., & Alta’ani, A. Z. (2021). The Effects of Accounting and Market Indicators towards Stock Return of Amman Stock Exchange Index Constituents. Journal of Economics, Finance and Management Studies, 4(10), 1926-1936.

Asadi, A., & Pahlevan, M. (2016). The relationship between ownership structure and firms' performance in Tehran stock exchange. Journal of Insurance and Financial Management, 1(2), 62-76.

Beisland, L. A. (2009). A review of the value relevance literature. The Open Business Journal, 2(1).

Bonazzi, L., & Islam, S. M. (2007). Agency theory and corporate governance: A study of the effectiveness of board in their monitoring of the CEO. Journal of modelling in management, 2(1), 7-23.

Francis, J., & Schipper, K. (1999). Have financial statements lost their relevance?. Journal of accounting Research, 37(2), 319-352.

Ghayoumi, A. F., Nayeri, M. D., Ansari, M., & Raeesi, T. (2011). Value-relevance of accounting information: Evidence from Iranian emerging stock exchange. International Journal of Economics and Management Engineering, 5(6), 830-835.

Ghufran, B., Awan, H. M., Khakwani, A. K., & Qureshi, M. A. (2016). What causes stock market volatility in Pakistan? Evidence from the field. Economics Research International, 1-9.

Gunaratne, C. Y. M., & Anuradha, N. (2017). Value relevance of accounting information in explaining stock returns in Sri Lanka. International Journal of Business and Management, 12(10), 223-233.

Hung, D. N., Ha, H. T. V., & Binh, D. T. (2018). Impact of accounting information on financial statements to the stock price of the energy enterprises listed on Vietnam’s stock market. International Journal of Energy Economics and Policy, 8(2), 1-6.

Igbinovia, I. M., & Ekwueme, C. M. (2022). Capital Structure and Stock Returns: Evidence from Consumer Goods Firms in Nigeria. Amity Journal of Management Research, 5(1), 324-334.

Janjua, I. A., Aksar, M., & Zafar, S. (2022). Accounting Information and Value Relevance Nexus: Evidence from Pakistan. Journal of Development and Social Sciences, 3(4), 574-588.

Kevin, S., & Martok, Y. (2022, August). The impact of earning per share, return on asset and firm size toward initial return of manufacturing companies conducting initial public offering listed in Indonesia stock. In Proceeding National Conference Business, Management, and Accounting (NCBMA) (Vol. 5, pp. 190-220).

Kim, H. Y., & Won, C. H. (2018). Forecasting the volatility of stock price index: A hybrid model integrating LSTM with multiple GARCH-type models. Expert Systems with Applications, 103, 25-37.

Miswanto, M., & Abdullah, Y. R. (2020). Analysis of the Effect of Firm Size, Profitability and Capital Structure on IPO Underpricing on the Indonesia Stock Exchange (IDX). International Journal of Innovation, Creativity and Change, 13(10), 829-844.

Nawaz, D., Rasheed, A., & Khalid, W. (2023). Impact of Firm's Value Relevance of Accounting Information on Stock Returns during Market over and under Reactions in Pakistan. Perennial journal of history, 4(2), 233-255.

Sharif, H. S. (2019). The impact of capital structure on stock return of selected firms in the pharmaceutical and chemical sector in Bangladesh. International Journal of Social Sciences Perspectives. 5(1), 9-21.

Shi, Y., Ahmed, K., & Paramati, S. R. (2021). Determinants of stock market development and price volatility in ASEAN plus three countries: The role of institutional quality. International Journal of Finance & Economics, 26(1), 560-572.

Sidik, (2023). Effect of accounting profit, cash flow, and return on assets on stock returns (Empirical Study on Consumer Goods Industry Listed on the Indonesia Stock Exchange Period 2007 -2009), Journal on Economics, Management and Business Technology, 1(2), 57-63.

Srivastava, A. (2011). Ownership structure and corporate performance: Evidence from India. International Journal of Humanities and Social Science, 1(1), 23-29.

Stephen, D., & Orowhuo, H. (2023). Stock Market Reaction to Accounting Information of Listed Pharmaceutical Companies in Nigeria. Formosa Journal of Multidisciplinary Research, 2(7), 1313-1324.

Wirdiansyah, R. D., & Munandar, A. (2023). The Effect of Managerial Ownership and Capital Structure on Stock Returns with Dividend Policy As an Intervening Variable. Journal Research of Social Science, Economics, and Management, 2(10).







How to Cite

Ghazi, Z. J. ., Khalid, W. ., & Rasheed, A. . (2024). Value Relevance of Accounting Information of Stock Returns with the Moderating Role of Firm’s Ownership Structure: A Case Study of Initial Public Offerings in Pakistan. Bulletin of Business and Economics (BBE), 13(2), 412-417.

Similar Articles

1-10 of 258

You may also start an advanced similarity search for this article.