Value Relevance of Cash Flow Statements in Syrian Banks: Evidence from the Damascus Securities Exchange
This study investigates whether the cash flow statements of banks provide valuable insights for Syrian investors. Using Ohlson's (1995) theoretical framework, which links stock prices to the book value of equity, earnings, and cash flow elements, the research aims to determine if factors like e...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
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Mashhad: Behzad Hassannezhad Kashani
2025-06-01
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| Series: | International Journal of Management, Accounting and Economics |
| Subjects: | |
| Online Access: | https://www.ijmae.com/article_223027_540de09c573843358767f961f72973b3.pdf |
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| Summary: | This study investigates whether the cash flow statements of banks provide valuable insights for Syrian investors. Using Ohlson's (1995) theoretical framework, which links stock prices to the book value of equity, earnings, and cash flow elements, the research aims to determine if factors like economic instability and investor behavior affect the value relevance of these accounting metrics. A model based on Ohlson's theory analyzes data from 11 Syrian private banks listed on the Damascus Securities Exchange (DSE) from 2010 to 2022. The analysis includes cash flow statement metrics to assess the usefulness of operating, investing, and financing cash flows. The pooled OLS technique, with heteroscedasticity correction, is employed. Findings show that operating cash flows (coefficient = 0.1131815, p-value = 0.224) do not offer insights beyond earnings, indicating they don’t explain stock price variations beyond what earnings do. Moreover, substituting operating cash flows with earnings does not significantly enhance the model's explanatory power (R² = 0.5263 vs. R² = 0.5193). Similarly, investing cash flows (coefficient = -0.001404, p-value = 0.634) and financing cash flows (coefficient = 0.6836272, p-value = 0.336) reveal no marginal value relevance. These outcomes may reflect the unique Syrian economic conditions, suggesting that cash flows do not improve earnings' predictive power for investors. Policymakers should consider promoting alternative performance metrics, such as adjusted earnings measures and loan portfolio quality, to better assess financial health in crisis contexts. |
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| ISSN: | 2383-2126 |