Accounting Comparability and Deviation from Firm’s Fundamental Value: The Mediating Role of Industry Competitiveness

Document Type : Research Paper

Author

Department of Accounting, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran

Abstract

This study investigates the impact of accounting comparability on the deviation of firms’ market value from their firm intrinsic value, examining the mediating role of industry competitiveness in this relationship. Data from 144 companies listed on the Tehran Stock Exchange from 2008 to 2023 were analyzed, classified into 11 distinct industries. The findings indicate that higher accounting comparability reduces deviation from firm intrinsic value. Moreover, accounting comparability has a positive and significant effect on industry competitiveness, and increased industry competitiveness, in turn, reduces deviation from firm intrinsic value. In other words, the results confirm that industry competitiveness serves as a mediating factor in the relationship between accounting comparability and deviation from firm intrinsic value. Additional analyses, employing LASSO regression to evaluate an alternative measure of firm intrinsic value and its deviation, support the primary findings.

Keywords

Main Subjects


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