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Benefits of global financial reporting models for developing markets: The case of Romania

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  • Mihaela Ionascu
  • Ion Ionascu
  • Marian Sacarin
  • Mihaela Minu

Abstract

The paper explores the benefits of global financial reporting models for developing countries, discussing the case of Romania, which, at the recommendations of the World Bank and the International Monetary Fund, exceeded the minimum requirements of the European Union, by imposing the full adoption of the International Financial Reporting Standards (IFRS) in individual financial statements of listed companies. Using regression analysis and decomposition techniques, the paper explores the evolution in value relevance of financial variables based on pre-(2009–2012) and post-(2014–2016) adoption samples, showing that after IFRS adoption financial information becomes significantly more relevant for equity valuations. We also provide empirical evidence showing that the degree of relevance for stock valuation, as well as the IFRS impact varies across types of firms. Overall, our findings tend to indicate the success of the financial reporting reform, which could be relevant for other jurisdictions facing similar decisions.

Suggested Citation

  • Mihaela Ionascu & Ion Ionascu & Marian Sacarin & Mihaela Minu, 2018. "Benefits of global financial reporting models for developing markets: The case of Romania," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-24, November.
    • Handle: RePEc:plo:pone00:0207175
    DOI: 10.1371/journal.pone.0207175
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    References listed on IDEAS

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    Cited by:

    1. Ion Ionascu & Mihaela Ionascu & Elena Nechita & Marian Sacarin & Mihaela Minu, 2022. "Digital Transformation, Financial Performance and Sustainability: Evidence for European Union Listed Companies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(59), pages 1-94.
    2. Adriana PADURARU (HORAICU) & Ana-Maria COMANDARU (ANDREI) & Volodea MATEEVICI, 2021. "The Analysis Of Financial And Non-Financial Indicators, Essential Component Of Appreciating The Global Performance," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 6(1), pages 45-56.

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