Segment Reporting In a Developing Economy: The Indian Banking Sector

• In Event: Emerging Economies

Abstract

The economic growth of any economy is influenced by the efficiency of its banking sector. In a developing economy such as India, the contribution of the banking sector is paramount to the overall economy's growth and sustainability. This paper investigates the value relevance of segment information for both public and private sector banks in India. In doing so, this paper examines a rapidly developing economy and perhaps its most critical sector during this period of strong economic growth. The paper finds that public sector banks have higher share prices, higher earnings and more equity compared with private sector banks. Segment earnings data is value relevant; however segment book value of equity is not value relevant for Indian banks. The number of segments is also value relevant and positively associated with share price.

Authors

• Jacqueline Louise Birt, The University of Queensland

• Mahesh Joshi, RMIT University

• Michael Kend, RMIT University