ISSN: 2226-3624
Open access
This study examines the evolving value relevance of accounting information in China's A-share market from 2005 to 2024. Using an unbalanced panel dataset of 52,721 firm-year observations from the CSMAR and Wind databases, we employ panel data regression models to investigate the roles of intellectual capital and strategic deviation. We document a significant decline in the value relevance of earnings and book value, particularly post-2014. Our findings reveal that intellectual capital's association with firm value is fully mediated by traditional accounting performance, rather than providing incremental explanatory power. Furthermore, strategic deviation exhibits a dual moderating effect: it weakens the value relevance of earnings while strengthening that of book value, revealing a "trust transfer" effect. Cross-industry analyses establish a critical boundary condition: this trust transfer mechanism holds in traditional industries but completely breaks down in high-tech firms, where strategic deviance severely undermines earnings relevance without enhancing book value's role. Our findings illuminate the dynamic and contingent nature of accounting usefulness in emerging knowledge economies.
Alvino, F., Di Vaio, A., Hassan, R., & Palladino, R. (2020). Intellectual capital and sustainable development: A systematic literature review. Journal of Intellectual Capital, ahead-of-print. https://doi.org/10.1108/JIC-11-2019-0259
Amir, E., & Lev, B. (1996). Value-relevance of nonfinancial information: The wireless communications industry. Journal of Accounting and Economics, 22(1), 3-30. https://doi.org/https://doi.org/10.1016/S0165-4101(96)00430-2
Ball, R., & Brown, P. (1968). An Empirical Evaluation of Accounting Income Numbers. Journal of Accounting Research, 6(2), 159-178. https://doi.org/10.2307/2490232
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage [Article]. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
Baron, R., & Kenny, D. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173-1182. https://doi.org/10.1037//0022-3514.51.6.1173
Barth, M. E., Li, K., & McClure, C. G. (2018). Evolution in Value Relevance of Accounting Information. Graduate School of Business
Stanford Universityb, 17-24.
Barth, M. E., Li, K., & McClure, C. G. (2023). Evolution in Value Relevance of Accounting Information [Article]. Accounting Review, 98(1), 1-28. https://doi.org/10.2308/TAR-2019-0521
Cao, S. S., Jiang, W., Lei, L., & Zhou, Q. (2024). Applied AI for finance and accounting: Alternative data and opportunities. Pacific-Basin Finance Journal, 84, 102307. https://doi.org/https://doi.org/10.1016/j.pacfin.2024.102307
Chen, M.-C., Cheng, S.-J., & Hwang, Y. (2005). An Empirical Investigation of the Relationship between Intellectual Capital and Firms’ Market Value and Financial Performance. Journal of Intellectual Capital, 6. https://doi.org/10.1108/14691930510592771
Chi, Y., Yang, Y., Lu, D., & Bao, Y. (2022). Corporate strategic deviance and stock price volatility: from the perspective of information asymmetry. Applied Economics Letters, 30, 1-5. https://doi.org/10.1080/13504851.2022.2094873
Ciftci, M., Darrough, M., & Mashruwala, R. (2013). Value Relevance of Accounting Information for Intangible-Intensive Industries and the Impact of Scale: The US Evidence. European Accounting Review, 23. https://doi.org/10.1080/09638180.2013.815124
Deephouse, D. L. (1999). To Be Different, or to Be the Same? It's a Question (And Theory) of Strategic Balance. Strategic Management Journal, 20(2), 147-166. http://www.jstor.org/stable/3094023
Dong, X., Cui, Y., & Gao, J. (2021). Strategic deviance and auditor selection. China Journal of Accounting Studies, 9(1), 81-112. https://doi.org/10.1080/21697213.2021.1927769
Edvinsson, L. (1997). Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower. HarperCollins. https://books.google.com.hk/books?id=fJWgQgAACAAJ
Finkelstein, S., & Hambrick, D. C. (1990). Top-Management-Team Tenure and Organizational Outcomes: The Moderating Role of Managerial Discretion. Administrative Science Quarterly, 35(3), 484-503. https://doi.org/10.2307/2393314
Grewal, J., Riedl, E. J., & Serafeim, G. (2019). Market reaction to mandatory nonfinancial disclosure. Management science, 65(7), 3061-3084.
Huang, S. (2018). The old yardstick cannot measure the new economy: On the deterioration and redemption of the relevance of accounting information[??????????——??????????????]. Contemporary Accounting Review[??????], 11(04), 1-23. https://doi.org/Cnki:sun:ddkj.0.2018-04-001
Lev, B., & Gu, F. (2016). The End of Accounting and the Path Forward for Investors and Managers. i-xxv. https://doi.org/10.1002/9781119270041.fmatter
Lev, B., & Zarowin, P. (1999). The boundaries of financial reporting and how to extend them [Article]. Journal of Accounting Research, 37(2), 353-385. https://doi.org/10.2307/2491413
Li, X., Li, H., & Tao, J. (2015). Is accounting information value relevant? Empirical evidence based on China's A-share market[??????????????A????????]. Scientific decision-making[????](01), 13-25. https://doi.org/Cnki:sun:kxjc.0.2015-01-002
Li, X., & Teng, F. (2024). The Relevance of Enterprise Digital Transformation to the Value of Accounting Information[?????????????????]. Friends of Accounting[????](05), 29-37. https://link.cnki.net/urlid/14.1063.F.20240226.1528.010
Liu, X., Song, Z., & Bai, J. (2023). Intellectual Capital, Innovation Efficiency and Corporate Performance[??????????????]. Financial and Accounting Newsletters[????](14), 34-39+101. https://doi.org/10.16144/j.cnki.issn1002-8072.2023.14.007
Maditinos, D., Chatzoudes, D., Tsairidis, C., & Georgios, T. (2011). The impact of intellectual capital on firms' market value and financial performance. Journal of Intellectual Capital, 12, 132-151. https://doi.org/10.1108/14691931111097944
Ohlson, J. A. (1995). Earnings, Book Values, and Dividends in Equity Valuation [Article]. Contemporary Accounting Research, 11(2), 661-687. https://doi.org/10.1111/j.1911-3846.1995.tb00461.x
Olbert, L. (2024). Financial analysts’ use of industry specific stock valuation models. Journal of Applied Accounting Research, 26(6), 108-138. https://doi.org/10.1108/jaar-11-2023-0365
Penman, S. H. (2015). Financial Ratios and Equity Valuation. In Wiley Encyclopedia of Management (pp. 1-7). https://doi.org/https://doi.org/10.1002/9781118785317.weom010079
Pulic, A. (2000). VAIC™ – an accounting tool for IC management. International Journal of Technology Management, 20(5-8), 702-714. https://doi.org/10.1504/IJTM.2000.002891
Rimmel, G. (2001). The New Organizational Wealth: Managing and Measuring Knowledge-Based Assets, Karl Erik Sveiby, Berrett-Koehler, San Fransisco, 1997, 275 pp. Scandinavian Journal of Management - SCAND J MANAG, 17, 522-524. https://doi.org/10.1016/S0956-5221(00)00026-9
Tang, J., Crossan, M., & Rowe, W. (2011). Dominant CEO, Deviant Strategy, and Extreme Performance: The Moderating Role of a Powerful Board. Journal of Management Studies, 48. https://doi.org/10.1111/j.1467-6486.2010.00985.x
Teng, D., & Yang, R. (2022). Has the relevance of accounting information in my country improved under the new auditing standards? — An analysis based on the perspective of enterprise heterogeneity[??????????????????????——???????????]. Journal of Hunan Institute of Engineering (Social Sciences Edition)[????????(?????)], 32(02), 19-28. https://doi.org/Cnki:sun:gchs.0.2022-02-003
Wang, R. (2018). Strategic Deviance and Accounting Conservatism. American Journal of Industrial and Business Management, 08, 1197-1228. https://doi.org/10.4236/ajibm.2018.85082
Xie, D., He, G., & Huang, L. (2020). Has the value relevance of my country's accounting information improved under the new accounting standards?[?????????????????????]. Investment Research[????], 39(03), 35-56. https://doi.org/Cnki:sun:tzyj.0.2020-03-004
Xue, S., Zhao, L., Xiao, Z., & Cheng, X. (2008). Does the international convergence of accounting standards increase the value relevance of accounting information?——A comparative study based on the new and old accounting standards[????????????????????????——?????????????]. Finance and Trade Economy[????](09), 62-67. https://doi.org/10.19795/j.cnki.cn11-1166/f.2008.09.011
Ye, K., Zhang, S., & Zhang, Y. (2014). Corporate strategic differences and the value relevance of accounting information[?????????????????]. Accounting Research[????](05), 44-51+94. https://doi.org/Cnki:sun:kjyj.0.2014-05-005
Yu, Y. (2024). Has the digital development of enterprises triggered a crisis in the value relevance of accounting information?[???????????????????????]. Journal of Shanghai University of Finance and Economics[????????], 26(02), 108-121+152. https://doi.org/10.16538/j.cnki.jsufe.2024.02.008
Zeng, L., & Zhang, J. (2023). A review and prospect of research on intellectual property information disclosure of listed companies[???????????????????]. Financial and Accounting Newsletters[????](05), 24-32+128. https://doi.org/10.16144/j.cnki.issn1002-8072.2023.05.003
Zhu, K., Zhao, X., & Sun, H. (2009). Accounting Standards Reform, Information Accuracy and Value Relevance: Empirical Evidence Based on China's Accounting Standards Reform[??????????????????——???????????????]. Management World [????](04), 47-54. https://doi.org/10.19744/j.cnki.11-1235/f.2009.04.006
Nilaya, Mustafa, H. Bin, & Saidin, S. F. Bin. (2026). The Value Relevance in Accounting Information: The Intermediary Role of Intellectual Capital and the Trust Transfer Effect of Strategic Deviation. International Journal of Academic Research in Economics and Management Sciences, 15(2), 464–486.
Copyright: © 2026 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode