TY - JOUR
T1 - The diffusion of innovation theory and the effects of IFRS adoption by multinational corporations on capital market performance
T2 - a cross-country analysis
AU - Elmghaamez, Ibrahim Khalifa
AU - Attah-Boakye, Rexford
AU - Adams, Kweku
AU - Agyemang, Jacob
N1 - Publisher Copyright:
© 2021 Wiley Periodicals LLC.
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2022/1/1
Y1 - 2022/1/1
N2 - This article seeks to contribute to International Financial Reporting Standards (IFRS) literature by examining the effects of adopting IFRS on stock market performance worldwide from the diffusion of innovation theory perspective. Our study revealed several interesting findings after using combinations of unique panel data sets from 110 countries worldwide and conducting a robust empirical analysis from 1995 to 2014. First, we found a positive association between late mandatory IFRS adoption and stock market integration in Europe. Second, our findings indicate a significant negative association between early IFRS adoption and the following financial indicators: stock market trading volumes, stock market capitalization, market turnover, and market return. Third, our study reveals an insignificant association between early IFRS adoption and stock price volatility alongside stock market development. Our findings are robust and have significant practical and policy implications for regulators and policymakers of multinational corporations.
AB - This article seeks to contribute to International Financial Reporting Standards (IFRS) literature by examining the effects of adopting IFRS on stock market performance worldwide from the diffusion of innovation theory perspective. Our study revealed several interesting findings after using combinations of unique panel data sets from 110 countries worldwide and conducting a robust empirical analysis from 1995 to 2014. First, we found a positive association between late mandatory IFRS adoption and stock market integration in Europe. Second, our findings indicate a significant negative association between early IFRS adoption and the following financial indicators: stock market trading volumes, stock market capitalization, market turnover, and market return. Third, our study reveals an insignificant association between early IFRS adoption and stock price volatility alongside stock market development. Our findings are robust and have significant practical and policy implications for regulators and policymakers of multinational corporations.
KW - Diffusion of innovation theory
KW - Financial market consequences
KW - International Financial Reporting Standards
KW - Stock market indicators
UR - http://www.scopus.com/inward/record.url?scp=85118384685&partnerID=8YFLogxK
U2 - 10.1002/tie.22244
DO - 10.1002/tie.22244
M3 - Article
AN - SCOPUS:85118384685
VL - 64
SP - 81
EP - 108
JO - Thunderbird International Business Review
JF - Thunderbird International Business Review
SN - 1096-4762
IS - 1
ER -