Network Effects in Countries’ Adoption of IFRS

Ramanna, Karthik; Sletten, Ewa

doi:10.2139/ssrn.1590245

Cited by 20 publications

(14 citation statements)

References 38 publications

(6 reference statements)

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“…Also, countries that required the use of IFRS for some but not all of their listed firms are excluded from our mandatory adopting country sample. 10 We collect the country's IFRS adoption status and the country-level adoption year from Ramanna and Sletten (2014). The authors collect country adoption years from the websites of two public audit firms 11 and the World Bank's Reports on Observance of Standards and Codes (ROSC reports).…”

Section: Sample Firms and Mandatory Ifrs Adoptersmentioning

confidence: 99%

Accounting Standards and International Portfolio Holdings

Wahid

2014

SSRN Journal

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Do differences in countries' accounting standards affect global investment decisions? We explore this question by examining how accounting distance, the difference in the accounting standards used in the investor's and the investee's countries, affects the asset allocation decisions of global mutual funds. We find that investors tend to underweight investees with greater accounting distance. Using the mandatory adoption of International Financial Reporting Standards (IFRS) as an event that changed the accounting standards of various country-pairs, we examine how two sources of changes in accounting distance -(i) changes due to IFRS adoption of the investee and (ii) changes due to IFRS adoption in the investor's country -affect global portfolio allocation decisions. We find that the tendency to underinvest in investees with greater accounting distance significantly weakens when accounting distance is reduced either from an investee's IFRS adoption or from IFRS adoption in the investor's country. The latter finding holds despite the fact that IFRS adoption in the investor's country had no impact on the accounting standards under which the investee firms present their financial information; the only change is in the investor's familiarity with these standards. This suggests that differences in accounting standards affect investor demand by imposing greater information-processing costs on those less familiar with the reporting standards.* The paper is a revised version of Gwen Yu's Ph. D. dissertation, previously titled "Accounting Standards and International Portfolio Holdings: An Analysis of Mutual Fund Holdings Following Mandatory Adoption of IFRS." We are grateful to Bin Ke (the editor) and an anonymous reviewer for their excellent suggestions. We thank Russ

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Section: Sample Firms and Mandatory Ifrs Adoptersmentioning

confidence: 99%

Accounting Standards and International Portfolio Holdings

Wahid

2014

SSRN Journal

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“…The perceived benefits, in terms of lowering cross-border transaction costs, increase for a given country as more jurisdictions with economic ties to that country adopt IFRS. Ramanna and Sletten (2014) empirically show that their hypothesis partly explains the prevalence of IFRS adoption.…”

mentioning

confidence: 91%

“…One possible explanation, identified by Ramanna and Sletten (2014), is that IFRS adoption is self-reinforcing. The perceived benefits, in terms of lowering cross-border transaction costs, increase for a given country as more jurisdictions with economic ties to that country adopt IFRS.…”

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confidence: 99%

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A Review of the IFRS-Adoption Literature

George

Shivakumar

2015

SSRN Journal

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“…Esse fenômeno da popularidade das IFRS pode ser explicado em parte, e as evidências confirmam, pelos benefícios percebidos pelos países em termos das relações econômicas entre o grupo crescente de países que adotam as IFRS, mais especificamente pela redução dos custos de transação e pela redução dos custos dos investimentos estrangeiros e do comércio internacional (Ramanna & Sletten, 2014).…”

Section: Lista De Tabelasunclassified

Efeitos da adoção obrigatória das IFRS sobre a qualidade do ambiente informacional: a relevância dos fatores institucionais

Braga¹

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Network Effects in Countries’ Adoption of IFRS

Cited by 20 publications

References 38 publications

Accounting Standards and International Portfolio Holdings

Accounting Standards and International Portfolio Holdings

A Review of the IFRS-Adoption Literature

Efeitos da adoção obrigatória das IFRS sobre a qualidade do ambiente informacional: a relevância dos fatores institucionais

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