Abstract:

Abstract This work analyzes the effect of shocks on accounting variables on a set of macroeconomic variables in the Brazilian scenario, based on the assumption of the usefulness of accounting information and its potential effect on the economy. In the survey, the following macroeconomic variables are analyzed: gross domestic product (GDP), unemployment and basic interest rate (Selic). The research, of a quantitative nature, uses vector autoregression (VAR) models to verify the effect of shocks of accounting variables (operating cash flow; earnings before interest and taxes - Ebit; net income; and shareholders' equity) on Brazilian macroeconomic variables from 2000 to 2019, analyzing 79 quarters in all. The research assumption, based on the previous literature, is that the accounting information carries informational elements of the real economy, being able, therefore, to predict movements of macroeconomic variables, such as GDP (Konchitchki & Patatoukas, 2014a; Brito, 2017; Silva, 2019); inflation (Shivakumar & Urcan, 2017) and employment (Hann, Li & Ogneva, 2017; Nallareddy & Ogneva, 2017), among others. As main results, shocks in the accounting variables take effect up to five quarters later and soon dissipate. Shocks in net income and Ebit have positive effects on GDP and shocks in operating cash reduce unemployment most of the time, while shocks in Ebit have little effect on the Selic. The findings show, in particular, the ability of accounting information to anticipate movements in macroeconomic variables, constituting a viable alternative for the analysis of these macrovariables, serving as an additional tool in the decision-making process, especially for investment-related decisions, which are very sensitive to economic instabilities. Author Biographies André Sekunda, Federal University of Paraiba Federal University of Paraiba. Address: Cidade Universitária, S/N | 58051-900 | João Pessoa/PB | Brazil. José Ricardo Revoredo da Silva, Federal University of Paraiba Federal University of Paraiba. Address: Cidade Universitária, S/N | 58051-900 | João Pessoa/PB | Brazil. Edilson Paulo, Federal University of Rio Grande do Sul Federal University of Rio Grande do Sul. Address: Avenida João Pessoa, 52 - sala 44 | Centro Histórico | 90040-000 | Porto Alegre/RS | Brazil. References Ball, R., & Brown, P. (1968). An empirical evaluation of accounting income numbers. Journal of accounting research, 159-178. DOI: https://doi.org/10.2307/2490232

Keywords: