The Impact of IFRS Adoption on Foreign Direct Investments: Insights for Emerging Countries

Lungu, Camelia Iuliana; Caraiani, Chirața; Dascălu, Cornelia

doi:10.1080/17449480.2017.1374546

Cited by 41 publications

(54 citation statements)

References 23 publications

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“…Gordon, Loeb, and Zhu (2012), Márquez-Ramos (2011), Okpala (2012), Efobi, Nnadi, Odebiyi and Beecroft (2014) and Chen, Ding and Xu (2014). Similar conclusions were found in studies concentrating on Eastern Europe Albu and Albu (2014), Lungu, Caraiani, and Dascălu (2017). In this context, it is assumed that one of influences of IFRS in Czech Republic is the attraction of FDIs.…”

Section: Introductionsupporting

confidence: 75%

“…Therefore we have a certain version of zero trade problem, and to solve this we will use the PPML model. Procházka and Ilinitchi (2011), Gordon, Loeb and Zhu (2012), Lungu, Caraiani and Dascălu (2017), Chen, Ding andXu (2011), Nejad et al (2018), Baltagi, Egger and Pfaffermayr (2014), Beneish, Miller, and Yohn (2015) are the latest papers which used PPML model to overcoe the zero trade problem. Whereas Busse, Könniger, and Nunnenkamp (2010) do not use IFRS dummy it is convenient paper to understand the relationship between macroeconomic variables and FDI.…”

Section: Data Issuesmentioning

confidence: 99%

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Exploring the Trend of Czech FDIs and their Effect to Institutional Environment

Jindřichovská¹,

Uğurlu²,

Thalassinos³

2020

IJEBA

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Purpose: The goal of this paper is to explore the trend of FDIs in the Czech Republic and its changes in recent years using the gravity model. Apart from traditional variables used in FDI models we also introduce IFRS in national accounting rules. Design/Methodology/Approach: We use open-source data from the World Bank and FDI data from the Czech national bank, to analyse a panel data of bilateral FDI for 19 EU countries over the period 2008-2017 by PPML specification. Findings:We have observed significant effect of positive impact on broader introduction of IFRS in 2010 in terms of country imports and exports. We observed lower significance of IFRS dummy in the gravity model, where dependent variable is the sum of FDI inflow and FDI outflow it is not significant in the models which dependent variables are FDI inward and FDI outward for FDIs. Practical Implications: In general, FDIs increased productivity in the Czech Republic, especially in 1990s. We assess the effect and possible contribution of traditional variables like size, GDP, border and distance to Czech FDIs. Originality/Value: We find that the positive effect of IFRS exists at 10 percent significance for FDIs. Nevertheless we claim that this effect is mixed with other institutional issues, namely institutional isomorphism. Further tests will be needed after the forthcoming change of the Czech accounting act, which is approaching after 2020.

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Section: Introductionsupporting

confidence: 75%

Section: Data Issuesmentioning

confidence: 99%

Exploring the Trend of Czech FDIs and their Effect to Institutional Environment

Jindřichovská¹,

Uğurlu²,

Thalassinos³

2020

IJEBA

View full text Add to dashboard Cite

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“…Using the OLS approach, their result provided evidence that IFRS enhances FDI inflows. Similarly (Jinadu et al, 2016;Johnson et al, 2016;Lungu et al, 2017) found evidence for increase in FDI inflows in relation to IFRS adoption.…”

Section: Ifrs and Fdimentioning

confidence: 91%

“…IFRS, as an institutional quality, is seen to influence FDI inflows. According to Lungu et al (2017) IFRS enhances FDI inflows. Higher FDI inflows consequently boost the growth of economies.…”

Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

“…Most research studies focused on how IFRS affect FDI (Gordon et al, 2012;Lungu, Caraiani, & Dascălu, 2017) economic growth (Özcan, 2016;Zaide & Huerta, 2014) and how FDI inflows affect economic growth (Makiela & Ouattara, 2018;Raza et al, 2019). Considering these empirical studies it is obvious that IFRS plays a role in the link among FDI inflows and economic growth.…”

Section: Introductionmentioning

confidence: 99%

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The Effect of International Financial Reporting Standards on the Association between Foreign Direct Investment and Economic Growth: Evidence from Selected Countries in Africa

Prah

2020

Journal of Accounting, Business and Finance Research

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The study aims at examining how IFRS adoption influences the relationship existing among foreign direct investment (FDI) and economic growth. The data consist of 12 developing economies that are the highest recipients of FDI in Africa, and the years of study are from 1996-2018. Using Ordinary Least Square and Generalized Least Square method of estimation, the result shows that IFRS is significantly positive to FDI. With FDI inflows in these countries, the result provides evidence that Non fully-IFRS adopted countries experience higher inflows of FDI than the fully-IFRS adopted countries. We find FDI inflows to also have positive influence on economic growth. The interaction of FDI and IFRS also influences economic growth positively when further analysis was carried on. The results provide evidence of positive relation among FDI, IFRS, and economic growth. IFRS adoption promotes FDI inflows which consequently spurs economic growth. There is, therefore, the need for policymakers to ensure adoption and enforcement of IFRS.

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IFRS Adoption and Performance of Stock Markets: A Comparative Analysis of Frontier Stock Markets in Sub‐Saharan Africa

Imhanzenobe

2024

Thunderbird Intl Bus Rev

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The International Financial Reporting Standards (IFRS) is a set of global accounting standards that tries to provide truer and fairer accounting figures by recommending more realistic measurement and recognition criteria, increasing the disclosure of relevant information, and increasing the comparability of financial statements across borders. Most of the literature on IFRS adoption addresses its impact on the value relevance of accounting figures but ignores the wider picture in terms of impact on stock market performance. The few studies that address IFRS adoption and stock market performance focus on advanced economies and lack proper theoretical underpinning. This study addresses the impact of IFRS adoption on stock market performance in Sub‐Saharan Africa. The study applied the autoregressive distributed lag model to test the research hypotheses. The Johannesburg, Nigerian, and Nairobi stock exchanges were selected as the sample markets because they constitute the major frontier markets for foreign investors wishing to penetrate the Sub‐Saharan African market. The sample period was from 1990 to 2020. The results of the study showed that IFRS adoption had a positive and significant impact on market efficiency and size for all the selected countries. IFRS adoption had a positive and significant impact on market liquidity in Kenya only. The study recommends that IFRS adopters should implement stock market policies that encourage the participation of foreign investors following the increase in financial statements comparability brought about by IFRS adoption.

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The Impact of IFRS Adoption on Foreign Direct Investments: Insights for Emerging Countries

Cited by 41 publications

References 23 publications

Exploring the Trend of Czech FDIs and their Effect to Institutional Environment

Exploring the Trend of Czech FDIs and their Effect to Institutional Environment

The Effect of International Financial Reporting Standards on the Association between Foreign Direct Investment and Economic Growth: Evidence from Selected Countries in Africa

IFRS Adoption and Performance of Stock Markets: A Comparative Analysis of Frontier Stock Markets in Sub‐Saharan Africa

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