Corporate Governance

Japan's capital markets have played a crucial role in the recent increase in the globalization of international capital markets. As a result it has become important to understand the similarities and differences in the way Japanese markets operate in comparison to the more familiar Anglo-American environment. One of the major differences that has attracted a great deal of attention is the relatively high average price/earnings [PE] ratio (Viner [1988]) for the stocks listed on the Tokyo Stock Exchange.

This article provides confirmatory evidence of the value-relevance of book values of oil and gas properties. Harris and Ohlson (1987) find that the book values correlate significantly with the inferred market values of oil and gas properties. Reserve recognition accounting requires the simultaneous publication of alternative measures that are often assumed to be more relevant values of the oil and gas properties.

In this paper, insider trading is viewed as a signal of managements' assessments of firms' future prospects and its information content is compared to that in managements' earnings forecasts. These forecasts are explicit statements of managements' assessments of future prospects. A number of measures of insider trading designed to capture the information aspect of trading are investigated.