{"title":"Accounting for bubbles: A discussion of Arif and Sul (2024)","authors":"Atif Ellahie","doi":"10.1016/j.jacceco.2024.101717","DOIUrl":null,"url":null,"abstract":"<div><div>A signal that identifies asset pricing bubbles would be valuable so investors could reposition their portfolios to weather the bubble, yet ex ante bubble identification has proven illusory. Arif and Sul (2024) study whether industry-level investment in net operating asset (NOA) accruals is an ex ante accounting-based signal that predicts bubbles. Using industry-level price run-ups across 49 countries, they find that NOA accruals predict a higher likelihood of a future crash, lower future returns, and larger analyst forecast errors, especially following run-up periods. The authors attribute these patterns to sentiment-driven overinvestment. My discussion summarizes the contributions of Arif and Sul's findings to the asset pricing bubbles, behavioral finance, and aggregate accruals literatures. I also outline empirical challenges faced by studies investigating bubbles and recommend approaches to further strengthen inferences. Finally, I propose opportunities for future research to integrate deeper accounting knowledge into bubble research.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"78 2","pages":"Article 101717"},"PeriodicalIF":5.4000,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Accounting & Economics","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165410124000478","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
A signal that identifies asset pricing bubbles would be valuable so investors could reposition their portfolios to weather the bubble, yet ex ante bubble identification has proven illusory. Arif and Sul (2024) study whether industry-level investment in net operating asset (NOA) accruals is an ex ante accounting-based signal that predicts bubbles. Using industry-level price run-ups across 49 countries, they find that NOA accruals predict a higher likelihood of a future crash, lower future returns, and larger analyst forecast errors, especially following run-up periods. The authors attribute these patterns to sentiment-driven overinvestment. My discussion summarizes the contributions of Arif and Sul's findings to the asset pricing bubbles, behavioral finance, and aggregate accruals literatures. I also outline empirical challenges faced by studies investigating bubbles and recommend approaches to further strengthen inferences. Finally, I propose opportunities for future research to integrate deeper accounting knowledge into bubble research.
一个能识别资产定价泡沫的信号将是非常有价值的，这样投资者就可以调整投资组合以抵御泡沫，然而事实证明事前识别泡沫是不切实际的。Arif 和 Sul（2024 年）研究了行业层面的净运营资产（NOA）应计投资是否是一种能预测泡沫的事前会计信号。他们利用 49 个国家的行业级价格上涨情况，发现净运营资产应计预测了未来崩盘的更高可能性、更低的未来回报率和更大的分析师预测误差，尤其是在价格上涨时期之后。作者将这些模式归因于情绪驱动的过度投资。我的讨论总结了 Arif 和 Sul 的发现对资产定价泡沫、行为金融学和总应计项目文献的贡献。我还概述了研究泡沫所面临的经验挑战，并提出了进一步加强推论的方法。最后，我提出了未来研究的机会，以便将更深层次的会计知识融入泡沫研究中。
期刊介绍：
The Journal of Accounting and Economics encourages the application of economic theory to the explanation of accounting phenomena. It provides a forum for the publication of the highest quality manuscripts which employ economic analyses of accounting problems. A wide range of methodologies and topics are encouraged and covered: * The role of accounting within the firm; * The information content and role of accounting numbers in capital markets; * The role of accounting in financial contracts and in monitoring agency relationships; * The determination of accounting standards; * Government regulation of corporate disclosure and/or the Accounting profession; * The theory of the accounting firm.
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