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Signaling over income smoothing and IFRS adoption by banks: a panel data analysis on MENA countries

Author

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  • Mouna Ben rejeb attia

    (The Higher Institute of Accountancy and Entrepreneurial Administration, ManoubaUniversity, Tunisia)

  • Houda Sassi

    (IHEC School of Business, LEFA, University of Carthage, Tunisia)

  • Naima Lassoued

    (The Business School of Tunis, Manouba University. Tunisia)

Abstract

The income smoothing purposes tend to vary across firms and countries depending on firms characteristics and environment. Following an overview of hypotheses, the empirical analysis investigates whether the tendency of bank managers to convey private information over income smoothing depend on IFRS adoption through a panel data model. Regressions are estimated on an unbalanced panel of bank from different MENA economies. Factors related to the local economy, institutional background and bank's characteristics are found to control varying levels of the dependent variable across time and space. We use a panel data estimation approach in order to obtain robust results, overcoming the problems related to serially correlated error terms. Our result indicate that IFRS adoption decrease the tendency to signal over income smoothing. This appears to be because IFRS improve earnings informativeness which reduces bank manager's motivation to smooth income for communication goal.

Suggested Citation

  • Mouna Ben rejeb attia & Houda Sassi & Naima Lassoued, 2013. "Signaling over income smoothing and IFRS adoption by banks: a panel data analysis on MENA countries," Economics Bulletin, AccessEcon, vol. 33(3), pages 2340-2356.
    • Handle: RePEc:ebl:ecbull:eb-13-00521
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    2. Aljughaiman, Abdullah A. & Nguyen, Tam Huy & Trinh, Vu Quang & Du, Anqi, 2023. "The Covid-19 outbreak, corporate financial distress and earnings management," International Review of Financial Analysis, Elsevier, vol. 88(C).
    3. Imen Khanchel & Naima Lassoued & Rym Gargoury, 2023. "CSR and firm value: is CSR valuable during the COVID 19 crisis in the French market?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(2), pages 575-601, June.
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    More about this item

    Keywords

    Tendency to signal; Income smoothing; IFRS adoption; Panel data analysis;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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