Conservatism and the Stock Market: Major Empirical Findings from Three Decades of Research

This chapter provides an overview of key papers in conservatism literature related to the stock market. It begins by exploring the interaction between conservatism, agency conflicts, and corporate governance. Next, it reviews the literature on stock market forces that drive conservatism. The chapter then examines the effects of conservatism on the stock market and its relationship with the broader macroeconomic environment. It concludes by discussing the association between conservatism and voluntary disclosures, including a review of relevant international literature.