دانلود رایگان مقاله عکس العمل بازار پیش از تصویب IFRS 9

Abstract

We are the first to examine the market reaction to 13 announcement dates related to IFRS 9 for over 5400 European listed firms. We find an overall positive reaction to the introduction of IFRS 9. The regulation is particularly beneficial to shareholders of firms in countries with weaker rule of law and a smaller divergence between local GAAP and IAS 39. Bootstrap simulations rule out the possibility that sampling error or data mining are driving our findings. Our main findings are also robust to confounding events and the extent of the media coverage for each event. These results suggest that investors perceive the new regulation as shareholder-wealth enhancing and support the view that stronger comparability across accounting standards of European firms is beneficial to international investors and outweighs the costs of poorer firm-specific information.

4. Conclusions

While much of the previous literature has examined the capital market effects around the compulsory adoption of IFRS, the literature on IFRS 9 is sparse. In this paper, we investigate the price reaction to news related to IFRS 9 adoption events. Our findings suggest that investors reacted positively to the ongoing accounting reform, particularly the shareholders of firms domiciled in countries with a weaker rule of law (contrary to previous literature on IFRS adoption events) and weaker divergence between local accounting standards and IAS 39. These results indicate that investors are confident with the ability of IFRS 9 to address the problems inherent in IAS 39 implementation, but cross-country differences are to be expected. Because smaller divergence between local accounting standards and IAS 39 is associated with poorer firm-specific information (Ding et al., 2007), our findings suggest that better cross-country comparability outweighs the costs of poorer firm-specific information for countries for which divergence between domestic accounting standards and IAS 39 is relatively small. Empirical studies could follow after the final implementation of IFRS 9 to determine whether these expectations have been fulfilled, and if the market reaction depends on specific firm characteristics in addition to country factors. Finally, our results must be interpreted carefully, considering the limitations that affect any event study.