•  
  •  
 

International Finance and Accounting

Abstract

This study examines the impact of the adoption of International Financial Reporting Standards (IFRSs) on foreign direct investment (FDI) flows in 17 transition economies based on data from 2000-2016. To test the reliability of the analysis results we have used the combined Ordinary Least-Squares regression, the Hausman test, Panel-Corrected Standard Errors, Generalized Method of Moments, Difference-in-Difference method. Our results were significantly different from the results of other similar studies. Although previous studies and analyzes have noted that the adoption of IFRSs has had a positive impact on the FDI flow, it has had a negative impact in our work.

References

1. Akisik, O. (2008). Accounting standards, corporate governance, and foreign direct investments: The experience of emerging market economies. Research in Accounting in Emerging Economies, 8, 157-187. 2. Chen, C. J. P., Ding, Y., & Xu, B. (2014). Convergence of accounting standards and foreign direct investment. The International Journal of Accounting, 49, 53-86. 3. Efobi, U. and Nnadi, M. (2015). How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment? SSRN Electronic Journal, pp. 4, 15. 4. Lipsey, R. and Chrystal, K. (2003). Economics. 10th ed. Oxford: Oxford University Press, pp. 641-642. 5. Dirk, W. (2003), Income Inequality in Latin America: Experiences and Policy Implications, Westminster: Overseas Development Institute. Available at http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/1928.pdf. 6. Jenkins, R. (2006), Globalisation, FDI and Employment in Vietnam, Transnational Corporations, 15 (1): 115-143. 7. Blalock, G., & Gertler, P. J. (2008). Welfare gains from foreign direct investment through technology transfer to local suppliers. Journal of international Economics, 74(2), 402-421. 8. Herzer, D. and Nunnenkamp, P. (2011). FDI and income inequality. Kiel: Institute for the World Economy, pp. 1-3. 9. Javorcik, B. (2013). Does FDI Bring Good Jobs to Host Countries? The World Bank Research Observer, 30(1), pp. 74-94. 10. Fugazza, M. and Trentini, C. (2014), Empirical Insights on Market Access and Foreign Direct Investment. New York: United Nations. Available at http://unctad.org/en/PublicationsLibrary/itcdtab67_en.pdf. 11. Dunning, J. H. (1988), “The eclectic paradigm of international production: A restatement and some possible extensions”, Journal of International Business Studies, 19 (1), 1-31. 12. Gordon, L.A., Loeb, M.P., & Zhu, W. (2012). The impact of IFRS adoption on foreign direct investment. Journal of Accounting and Public Policy, 31(4), 374-398. 13. Asiedu, E., (2006). Foreign Direct Investment in Africa: The role of natural resources, market Size, government policy, institutions and political stability. World Economy, 29(1): 63-72. 14. Busse, M. and Hofeker, C. (2007) Political risk, institutions and foreign direct investment, European Journal of Political Economy, 23, 397–415. 15. Asiedu, E., and Lien, D., (2011). Democracy, Foreign Direct Investment and natural resources, Journal of International Economics, 84; 99-111. 16. Márquez-Ramos, L. (2008). The Effect of IFRS Adoption on Trade and Foreign Direct Investments. Emerging Markets Finance and Trade, 47(0), pp.42-57. 17. Portes, R. and Rey, H. (2005), “The determinants of cross-border equity flows,” Journal of International Economics 65(2), 269-296. 18. Daske, H., Hail, L., Leuz, C. and Verdi, R.S. (2008) 'Mandatory IFRS reporting around the world: Early evidence on the economic consequences', Journal of Accounting Research, 46(5), pp.1085-1442. 19. Wysocki, P. (2011). New Institutional Accounting and IFRS, Accounting and Business Research, 41(3), 309-328. 20. Wehrfritz, M., & Haller, A. (2014). National influence on the application of IFRS: Interpretations and accounting estimates by German and British accountants. Advances in Accounting, 30(1), 196-208. 21. Nnadi, M. and Soobaroyen, T. (2015). International financial reporting standards and foreign direct investment: The case of Africa. Advances in Accounting, 31(2), pp.228-238. 22. Armstrong, C.S., Barth, M.E., Jagolinzer, A.D., & Riedl, E.J. (2010). Market reaction to the adoption of IFRS in Europe. The Accounting Review, 85, 31–61. 23. Bushman, R., Piotroski, J. and Smith, A. (2004). What Determines Corporate Transparency? Journal of Accounting Research, 42(2), pp.207-252. 24. World Development Indicators. URL: http://datatopics.worldbank.org/world-developmentindicators/ 25. International Financial Statistics. URL: https://data.imf.org/?sk=4C514D48-B6BA-49ED-8AB9-52B0C1A0179B 26. Deloitte Global Services. IFRS Adoption by Country. URL: https://www.iasplus.com/en/resources/ifrs-topics/adoption-of-ifrs 27. World Governance Indicators. URL: https://datacatalog.worldbank.org/dataset/worldwidegovernance-indicators 28. International Accounting Standards Board. URL: https://www.ifrs.org/groups/international-accountingstandards-board/#resources 29. Pettinger, T. (2017). Real GDP Per Capita | Economics Help. [online] Economicshelp.org: https://www.economicshelp.org/blog/glossary/real-gdp-capita/. 30. Globerman, S., Shapiro, D., 2002. Global foreign direct investment flows: the role of governance infrastructure. World Development 30 (11), 1899–1919. 31. Blundell, R.W. and S.R. Bond (1998) “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models”, Journal of Econometrics, vol. 87, pp. 115-143. 32. United Nations Conference On Trade and Development (2007). World Investment Report. Transnational Corporations, Extractive Industries and Development. [online] New York: United Nations Publication, pp.245-249.: https://unctad.org/en/Docs/wir2007_en.pdf

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.