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Segment reporting in a developing economy: the Indian banking sector

Jacqueline Birt (University of Queensland, Brisbane, Australia)
Mahesh Joshi (School of Accounting, RMIT University, Melbourne, Australia)
Michael Kend (School of Accounting, RMIT University, Melbourne, Australia)

Asian Review of Accounting

ISSN: 1321-7348

Article publication date: 6 February 2017

854

Abstract

Purpose

The purpose of this paper is to investigate the value relevance of segment information for both public and private sector banks in India. In doing so, this paper examines a rapidly developing economy and perhaps its most critical sector during this period of strong economic growth.

Design/methodology/approach

In this study uses the simplified Ohlson model, for a sample of 136 private sector and public sector banks for the period 2007-2010 in India.

Findings

The paper finds that public sector banks have higher share prices, higher earnings and more equity compared with private sector banks. Segment earnings data is highly value relevant for both sectors; however, segment equity data is only marginally value relevant for Indian banks. The number of segments is also value relevant and associated with higher share prices.

Originality/value

The results of this study contribute additional evidence to the literature on segment reporting by studying the effect of adoption of segment reporting in an emerging market. Findings from the paper are particularly relevant as India is currently in the process of changing its segment reporting requirements and moving to an IFRS-based segment standard.

Keywords

Citation

Birt, J., Joshi, M. and Kend, M. (2017), "Segment reporting in a developing economy: the Indian banking sector", Asian Review of Accounting, Vol. 25 No. 1, pp. 127-147. https://doi.org/10.1108/ARA-06-2015-0064

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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