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Does IFRSs adoption contribute to the protection of minority investors?

Author

Listed:
  • Bogdan DIMA

    (West University of Timisoara)

  • Stefana Maria DIMA

    (West University of Timisoara)

  • Miruna-Lucia NACHESCU

    (West University of Timisoara)

Abstract

The purpose of the present article is to analyse the connection between the protection of minority shareholders and International Financial Reporting Standards’ (IFRSs’) adoption. Thus, the authors estimate the status of IFRSs’ adoption for 109 countries and involve the Protecting Minority Investors’ ranking (as a component of Ease of Doing Business Index provided by World Bank). In order to deal with the reverse causality issues, a GMM methodological framework was adopted. The results reveal that the impact of IFRSs’ adoption on a country’s rank (in respect to the status of minority investors’ protection) is reverse U-shaped and statistically significant. These findings are robust, even if we consider different control variables (legal system features, conditions of borrowed financial resources’ markets and insolvency resolution procedures) and estimation methodologies. In addition, the authors compare OECD versus non-OECD countries and find that the strongest impact of IFRSs’ adoption is in the case of the latter group.

Suggested Citation

  • Bogdan DIMA & Stefana Maria DIMA & Miruna-Lucia NACHESCU, 2018. "Does IFRSs adoption contribute to the protection of minority investors?," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 16(152), pages 584-584.
    • Handle: RePEc:aud:audfin:v:16:y:2018:i:152:p:584
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    More about this item

    Keywords

    minority shareholders; IFRSs; legal system; insolvency; OECD & non-OECD countries;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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