THE VALUE RELEVANCE ON RETAIL TRADE INDUSTRY: EVIDENCE FROM SOUTHEAST ASIAN COUNTRIES

The purpose of this study is to analyze value relevance of accounting information based on a sample of retail trade corporations listed on one of the following capital markets (such as Indonesia Stock Exchange, Malaysia Stock Exchange, and Thailand Stock Exchange). The results show that accounting information is value relevance to all the observed markets. The highest value relevance of accounting information in Malaysia (R =83%) and Thailand have the lowest relation with share price (R =68%), while in Indonesia value relevance of accounting information is in between (R =76%). The incremental explanatory power of book value and earnings differs across a year and across countries. Book value has modest incremental explanatory power in Malaysia and Thailand, but considerably stronger in Indonesia. Earnings have little incremental explanatory power in Indonesia, but significant incremental explanatory power in Malaysia and Thailand. Overall periods, the explanatory power common to book value and earnings is high in Indonesia and Malaysia but near to zero in Thailand