The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability

Mark DeFond, Xuesong Hu, Mingyi Hung and Siqi Li

Journal of Accounting and Economics, 2011, vol. 51, issue 3, 240-258

Abstract: Proponents of IFRS argue that mandating a uniform set of accounting standards improves financial statement comparability that in turn attracts greater cross-border investment. We test this assertion by examining changes in foreign mutual fund investment in firms following mandatory IFRS adoption in the European Union in 2005. We measure improved comparability as a credible increase in uniformity, defined as a large increase in the number of industry peers using the same accounting standards in countries with credible implementation. Consistent with this assertion, we find that foreign mutual fund ownership increases when mandatory IFRS adoption leads to improved comparability.

Keywords: Comparability; Uniformity; International; Financial; Reporting; Standards; Mutual; funds; Foreign; investment (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (155)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165-4101(11)00018-8
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:51:y:2011:i:3:p:240-258

Access Statistics for this article

Journal of Accounting and Economics is currently edited by J. L. Zimmerman, S. P. Kothari, T. Z. Lys and R. L. Watts

More articles in Journal of Accounting and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().