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Informativeness of stock prices after IFRS adoption in Brazil

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  • Castro, F. Henrique
  • Santana, Verônica

Abstract

This study investigates the effects of the adoption of the International Financial Reporting Standards (IFRS) on prices’ informativeness in the Brazilian capital market. Consistent with the hypothesis that IFRS increases the amount and quality of firm-specific information available to the market, we found that after the adoption, prices in the Brazilian stock market are less synchronous and that their firm-level volatility increased relative to total volatility. This means that prices move more according to firm-specific shocks than to market-wide events, indicating that prices became more informative and, thus, more useful for investment decision-making.

Suggested Citation

  • Castro, F. Henrique & Santana, Verônica, 2018. "Informativeness of stock prices after IFRS adoption in Brazil," Journal of Multinational Financial Management, Elsevier, vol. 47, pages 46-59.
    • Handle: RePEc:eee:mulfin:v:47-48:y:2018:i::p:46-59
    DOI: 10.1016/j.mulfin.2018.09.001
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    Cited by:

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    2. Mona A. ElBannan & Omar Farooq, 2019. "When are earnings informative?," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 12(3), pages 388-406, June.
    3. Paula Silva, Ana & Fontes, Alexandra & Martins, Adelaide, 2021. "Perceptions regarding the implementation of International Financial Reporting Standards in Portugal and Brazil," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 44(C).

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    More about this item

    Keywords

    Synchronicity; Volatility; IFRS; Brazil;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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