An Analysis of the Relevance of Minority Stockholder Interest Information
Posted: 1 Sep 1997
Date Written: June 1997
Abstract
This study examines the relevance of minority interest financial statement information by using existing voluntary disclosure data. Minority interests are the result of acquisitions and have investor implications concerning disclosure and diversification. Regression analyses indicate that disaggregating the equity interest data into majority and minority shareholder interest information provides increased explanatory value about stock market returns. Furthermore, the market responds to the interaction between the size of the minority interest and the corresponding financial statement information. The findings provide weak evidence that minority interests are best classified as equity as opposed to a liability or the mezzanine category of neither.
JEL Classification: M41, M44, G12, G34
Suggested Citation: Suggested Citation