International Financial Reporting Standards, institutional infrastructures, and implied cost of equity capital around the world

被引：32
作者：
Kim J.-B. [1 ]
Shi H. [2 ]
Zhou J. [3 ]
机构：
[1] College of Business, City University of Hong Kong, Kowloon
[2] School of Management, Fudan University, Shanghai
[3] School of Accountancy, Shanghai University of Finance and Economics, Shanghai
来源：
Review of Quantitative Finance and Accounting | 2014年 / 42卷 / 3期
基金：
中国国家自然科学基金;
关键词：
Cost of equity capital; Enforcement mechanism; Governance mechanism; Institutional infrastructure; International financial reporting standards (IFRS);
D O I：
10.1007/s11156-013-0350-3
中图分类号：
学科分类号：
摘要：
Using a sample of 21,608 firm-years from 34 countries during 1998-2004, this study evaluates the impact of voluntary adoption of the International Financial Reporting Standards (IFRS) on a firm's implied cost of equity capital. We find that the implied cost of equity capital is significantly lower for the full IFRS adopters than for the non-adopters even after controlling for potential self-selection bias and firm-specific and country-level factors that are known to affect the implied cost of capital. This result holds irrespective of institutional infrastructure determining a country's governance and enforcement mechanisms. We also find that the implied cost of equity capital decreases with the efficacy of institutional infrastructure. Moreover, we provide evidence that the cost of capital-reducing effect of IFRS adoption is greater when IFRS adopters are from countries with weak institutional infrastructures than when they are from countries with strong infrastructures. The above results are robust to a battery of sensitivity checks. © 2013 Springer Science+Business Media New York.
引用
收藏
页码：469 / 507
页数：38
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