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"The Usefulness of Accounting Information and the Valuation of the Firm \\ A Reexamination of the Efficient Market Hypothesis \\"(in Japanese)



A quest for abnormal returns by using accounting information plays an important role of 'price discovery' in the investment practice. Coincidentally, it provides valuable counter-evidence for the traditional framework and theory in the academic fields and it encourages academicians to reexamine them. However, it is a mistake to emphasize inefficiency of the market and irrationality of investors based on those observed anomalies immediately. Originally, the efficient market is the ideal type. Therefore, we cannot test it directly. The efficient market hypothesis as an ideal type implies that investors can understand accounting information accurately and response quickly and correctly and that, by investors' rational behavior, accounting information should be perfectly reflected in stock prices as soon as it is released. However, in the real world, accounting information does not always present the evident information, which investors can distinguish into good news and bad news instantaneously. Therefore, it is also a mistake to attribute all of the anomalies to the decision biases of investors though such a type of conclusion is often adopted in behavioral finance. Investors receive various accounting information in the complicated information environment. It is necessary for investors to obtain ex-ante and ex-post information for interpreting accounting information. We should investigate the market response to accounting information considering their decision process. Moreover, accounting information has the inherent attributes (or characteristics) such as conservatism. Those attributes may be obstacles for investors to understand accounting information accurately and quickly. How those attributes affect investors' decision has been the main research theme in empirical accounting research. Those studies gain more importance recently.

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