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Do Accounting Standards Matter for Productivity?

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  • Rajiv Banker
  • Rong Huang
  • Yinghua Li
  • Sha Zhao

Abstract

In this study, we examine whether productivity shifts when accounting standards change. Using mandatory International Financial Reporting Standards (IFRS) as a shock to the accounting regime, we examine the changes in country‐level productivity. We find that mandatory IFRS‐adopting countries experience significant increases in total factor productivity (TFP) and labor productivity. The post‐adoption productivity improvements are greater for countries without IFRS convergence. Further, TFP increases more for countries that experience a larger increase in industry comparability. Taken together, the evidence suggests that the new IFRS accounting regime increases economic productivity via improving information environments and facilitating internal firm decisions.

Suggested Citation

  • Rajiv Banker & Rong Huang & Yinghua Li & Sha Zhao, 2021. "Do Accounting Standards Matter for Productivity?," Production and Operations Management, Production and Operations Management Society, vol. 30(1), pages 68-84, January.
    • Handle: RePEc:bla:popmgt:v:30:y:2021:i:1:p:68-84
    DOI: 10.1111/poms.13257
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    3. Andres F. Jola‐Sanchez, 2022. "How does warfare affect firms' productivity?," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 1940-1962, May.

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