IDEAS home Printed from https://ideas.repec.org/a/aud/audfin/v15y2017i146p218.html
   My bibliography  Save this article

The implications of IFRS adoption on foreign direct investment in poor countries

Author

Listed:
  • Catalina Florentina PRICOPE

    (Bucharest University of Economic Studies)

Abstract

Globalisation has contributed to the acceleration of international capital transactions and has increased investors’ need to access homogeneous, reliable and comparable financial reports. The objective of the study is to investigate the impact of International Financial Reporting Standards adoption on foreign direct investment flows in poor countries. In order to achieve this objective, the propensity score matching method was applied on a sample of 38 poor countries between 2008 and 2014. Results indicate that International Financial Reporting Standards adoption has a positive impact on foreign direct investment flows in poor countries.

Suggested Citation

  • Catalina Florentina PRICOPE, 2017. "The implications of IFRS adoption on foreign direct investment in poor countries," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 15(146), pages 218-218.
    • Handle: RePEc:aud:audfin:v:15:y:2017:i:146:p:218
    as

    Download full text from publisher

    File URL: http://revista.cafr.ro/temp/Article_9534.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, January.
    2. EFOBI Uchenna & NNADI Matthias, 2015. "How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment?," Working Papers of the African Governance and Development Institute. 15/014, African Governance and Development Institute..
    3. Laura Márquez-Ramos, 2011. "European Accounting Harmonization: Consequences of IFRS Adoption on Trade in Goods and Foreign Direct Investments," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 42-57, September.
    4. Chen, Charles J.P. & Ding, Yuan & Xu, Bin, 2014. "Convergence of accounting standards and foreign direct investment," The International Journal of Accounting, Elsevier, vol. 49(1), pages 53-86.
    5. Oluwatosin Adeniyi & Festus O. Egwaikhide & Abimbola Oyinlola & Olusegun Omisakin, 2012. "Foreign Direct Investment, Economic Growth and Financial Sector Development in Small Open Developing Economies," Economic Analysis and Policy, Elsevier, vol. 42(1), pages 105-127, March.
    6. Efobi, Uchenna & Nnadi, Matthias, 2015. "Foreign Aid, IFRS Adoption and Foreign Direct Investment," EconStor Preprints 114568, ZBW - Leibniz Information Centre for Economics.
    7. DeFond, Mark & Hu, Xuesong & Hung, Mingyi & Li, Siqi, 2011. "The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability," Journal of Accounting and Economics, Elsevier, vol. 51(3), pages 240-258, April.
    8. Gordon, Lawrence A. & Loeb, Stephen E., 1982. "Accounting and public policy," Journal of Accounting and Public Policy, Elsevier, vol. 1(1), pages 1-3.
    9. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    10. Gwen Yu & Aida Sijamic Wahid, 2014. "Accounting Standards and International Portfolio Holdings," Harvard Business School Working Papers 14-059, Harvard Business School.
    11. Globerman, Steven & Shapiro, Daniel, 2002. "Global Foreign Direct Investment Flows: The Role of Governance Infrastructure," World Development, Elsevier, vol. 30(11), pages 1899-1919, November.
    12. Acaravci, Ali & Ozturk, Ilhan, 2012. "Foreign Direct Investment, Export and Economic Growth: Empirical Evidence from New EU Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 52-67, June.
    13. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969.
    14. Poudel, Ghanshyam & Hellmann, Andreas & Perera, Hector, 2014. "The adoption of International Financial Reporting Standards in a non-colonized developing country: The case of Nepal," Advances in accounting, Elsevier, vol. 30(1), pages 209-216.
    15. Zeghal, Daniel & Mhedhbi, Karim, 2006. "An analysis of the factors affecting the adoption of international accounting standards by developing countries," The International Journal of Accounting, Elsevier, vol. 41(4), pages 373-386, 012.
    16. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nnadi, Matthias & Soobaroyen, Teerooven, 2015. "International financial reporting standards and foreign direct investment: The case of Africa," Advances in accounting, Elsevier, vol. 31(2), pages 228-238.
    2. Simplice A. Asongu & Uchenna R. Efobi & Ibukun Beecroft, 2021. "Aid in Modulating the Impact of Terrorism on FDI: No Positive Thresholds, No Policy," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 432-456, October.
    3. Eric Evans Osei Opoku & Alex O. Acheampong & Janet Dzator & Nana Kwabena Kufuor, 2022. "Does environmental sustainability attract foreign investment? Evidence from developing countries," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3542-3573, November.
    4. EFOBI Uchenna & NNADI Matthias, 2015. "How Does Foreign Aid Affect the Relationship between IFRS Adoption and Foreign Direct Investment?," Working Papers of the African Governance and Development Institute. 15/014, African Governance and Development Institute..
    5. Nombulelo BRAITON & Nicholas M. ODHIAMBO, 2024. "Capital Flows And Institutional Quality: A Systematic Literature Review," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 9(1), pages 113-123, March.
    6. Akhtaruzzaman, M. & Berg, Nathan & Hajzler, Christopher, 2017. "Expropriation risk and FDI in developing countries: Does return of capital dominate return on capital?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 84-107.
    7. Simplice A. Asongu & Uchenna R. Efobi & Ibukun Beecroft, 2015. "FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries," Research Africa Network Working Papers 15/019, Research Africa Network (RAN).
    8. Bailey, Nicholas, 2018. "Exploring the relationship between institutional factors and FDI attractiveness: A meta-analytic review," International Business Review, Elsevier, vol. 27(1), pages 139-148.
    9. Younsi, Moheddine & Bechtini, Marwa, 2019. "Do institutions and good governance affect inward FDI? Empirical evidence from emerging countries," MPRA Paper 94815, University Library of Munich, Germany.
    10. Godfred William Cantah & Gabriel William Brafu-Insaidoo & Emmanuel Agyapong Wiafe & Abass Adams, 2018. "FDI and Trade Policy Openness in Sub-Saharan Africa," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 97-116, January.
    11. Mariam Camarero & Laura Montolio & Cecilio Tamarit, 2019. "Determinants of German outward FDI: variable selection using Bayesian statistical," Working Papers 1906, Department of Applied Economics II, Universidad de Valencia.
    12. Fathi Ali & Norbert Fiess & Ronald MacDonald, 2010. "Do Institutions Matter for Foreign Direct Investment?," Open Economies Review, Springer, vol. 21(2), pages 201-219, April.
    13. Camarero, Mariam & Montolio, Laura & Tamarit, Cecilio, 2019. "What drives German foreign direct investment? New evidence using Bayesian statistical techniques," Economic Modelling, Elsevier, vol. 83(C), pages 326-345.
    14. Nataliia Osina, 2021. "Global governance and gross capital flows dynamics," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(3), pages 463-493, August.
    15. Efobi, Uchenna & Nnadi, Matthias, 2015. "Foreign Aid, IFRS Adoption and Foreign Direct Investment," EconStor Preprints 114568, ZBW - Leibniz Information Centre for Economics.
    16. Akisik, Orhan, 2020. "The impact of financial development, IFRS, and rule of LAW on foreign investments: A cross-country analysis," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 815-838.
    17. Dimitra Mitsi & Constantina Kottaridi, 2022. "Fiscal and non-fiscal institutional context effects and foreign direct investment: empirical evidence in developing countries," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 72(1-2), pages 11-33, January-J.
    18. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2019. "The foreign direct investment-institution nexus in oil-abundant countries," Working Papers 1903, Department of Applied Economics II, Universidad de Valencia.
    19. Shah, Mumtaz Hussain, 2016. "Financial development and foreign direct investment: The case of Middle East and North African (MENA) developing nations," MPRA Paper 82013, University Library of Munich, Germany.
    20. Ivar Kolstad & Arne Wiig, 2013. "Digging in the dirt? Extractive industry FDI and corruption," Economics of Governance, Springer, vol. 14(4), pages 369-383, November.

    More about this item

    Keywords

    IFRS adoption; foreign direct investment; poor countries; propensity score matching;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aud:audfin:v:15:y:2017:i:146:p:218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dumitru Valentin Florentin (email available below). General contact details of provider: http://revista.cafr.ro/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.