Value relevance of business strategy: evidence from Indian banks

Abstract

This study examines the value relevance of accounting information on business strategies using unique panel data from banks in india, for a 29-quarter period. based on the publicly available quarterly revenue information on business segments, the study will associate the revenue segment information with choices related to business strategies of all ownership type banks and allow equity prices to predict prospective performance and risks associated with strategic choices related to focus, diversification and differentiation.by applying the manova analysis, this study show that for any state-owned bank, strategies are differentiated over time. the study also finds that for any time strategies are differentiated across banks under any ownership type. by applying the panel data analysis, the study find that market contains information on strategic focus and diversification particularly in case of public sector and new private sector banks.