INSTITUTIONAL MATRIX AND RELEVANCE OF ACCOUNTING INFORMATION:
A MULTILEVEL STUDY IN THE 20 BIGGEST ECONOMIES
DOI:
https://doi.org/10.22561/cvr.v34i2.7684Keywords:
Relevance of Accounting Information, Institutional Matrices, Linear Hierarchical Regression ModelAbstract
The purpose of this study was to verify the relationship between institutional matrices in the relevance of accounting information in the 20 economies that had the highest market capitalization in 2018. The sample was composed of 2.542 companies during the period from 2010 to 2018, totaling 20.002 observations for the entire analyzed period. The variables used for the relevance of accounting information were Earnings Per Share and Shareholders' Equity per Share. For Corporate Governance, the variable G of the Environmental Social and Governance Index (ESG) and for the institutional matrices the six individual variables of the Word Governance Index (WGI). The data were analyzed using linear hierarchical models with repeated measures (HLM3). The results of the research evidenced that corporate practices are aligned with the institutions of different economies, that is the rules and sets of rules of the countries have an influence on governance structures. Additionally, the institutional matrices improve the relevance of accounting information. Therefore, it is concluded that in the same way that accounting information reduces uncertainties, they transmit signals to the market and this transmission becomes stronger in countries with better institutional levels.
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