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Working Paper: Do Adoptions of International Financial Reporting Standards Enhance Capital Investment Efficiency?

TitleDo Adoptions of International Financial Reporting Standards Enhance Capital Investment Efficiency?
Authors
KeywordsIFRS adoption
Capital investment efficiency
Financial disclosure
Information asymmetry
Comparability of accounting information
Issue Date2013
PublisherAmerican Accounting Association.
Citation
The Accounting Review (under review), 2013 How to Cite?
AbstractWe examine whether adoptions of International Financial Reporting Standards (IFRS) enhance capital investment efficiency, a purported benefit. Data for 10,340 adoptions across 26 countries during 2001-08 reveal mandatory but not voluntary IFRS adoptions to be significantly associated with enhanced capital investment efficiency measured by investment-cash flow sensitivity and value-enhancing risk taking. In contrast to prior findings for capital market effects of IFRS adoptions, associations between mandatory IFRS adoptions and capital investment efficiency are stronger in countries with weaker legal protections, more concentrated ownership, and prior reporting standards that differ more from IFRS. Combined, these findings lend support to mandatory but not voluntary IFRS adoptions serving to enhance firm-level capital investment efficiency, particularly in countries with weaker investor protections.
Persistent Identifierhttp://hdl.handle.net/10722/193750
ISSN
2015 Impact Factor: 1.953
2015 SCImago Journal Rankings: 4.478
SSRN

 

DC FieldValueLanguage
dc.contributor.authorBiddle, GC-
dc.contributor.authorCallahan , CM-
dc.contributor.authorHong, HA-
dc.contributor.authorKnowles, RL-
dc.date.accessioned2014-01-23T08:19:03Z-
dc.date.available2014-01-23T08:19:03Z-
dc.date.issued2013-
dc.identifier.citationThe Accounting Review (under review), 2013-
dc.identifier.issn0001-4826-
dc.identifier.urihttp://hdl.handle.net/10722/193750-
dc.description.abstractWe examine whether adoptions of International Financial Reporting Standards (IFRS) enhance capital investment efficiency, a purported benefit. Data for 10,340 adoptions across 26 countries during 2001-08 reveal mandatory but not voluntary IFRS adoptions to be significantly associated with enhanced capital investment efficiency measured by investment-cash flow sensitivity and value-enhancing risk taking. In contrast to prior findings for capital market effects of IFRS adoptions, associations between mandatory IFRS adoptions and capital investment efficiency are stronger in countries with weaker legal protections, more concentrated ownership, and prior reporting standards that differ more from IFRS. Combined, these findings lend support to mandatory but not voluntary IFRS adoptions serving to enhance firm-level capital investment efficiency, particularly in countries with weaker investor protections.-
dc.languageeng-
dc.publisherAmerican Accounting Association.-
dc.relation.ispartofThe Accounting Review (under review)-
dc.subjectIFRS adoption-
dc.subjectCapital investment efficiency-
dc.subjectFinancial disclosure-
dc.subjectInformation asymmetry-
dc.subjectComparability of accounting information-
dc.titleDo Adoptions of International Financial Reporting Standards Enhance Capital Investment Efficiency?en_US
dc.typeWorking_Paperen_US
dc.identifier.emailBiddle, GC: biddle@hkucc.hku.hk-
dc.publisher.placeUnited States-
dc.identifier.ssrn2353693-

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