Diffusion theory, national corruption and IFRS adoption around the world
Diffusion theory, national corruption and IFRS adoption around the world
International financial reporting standards (IFRS) have been widely adopted around the world. However, while there is a lot of evidence on the economic consequences of IFRS adoption (e.g. foreign direct investments; development of financial markets; financial accounting quality; access to capital; and stock market liquidity), especially at the firm-level, few studies examine the national factors that may impede or facilitate the adoption of IFRS at the country-level. This paper seeks to make two new contributions to the extant international accounting literature by examining the influence of national corruption on the (i) speed and (ii) extent of IFRS adoption around the world. Relying on Rogers's (1962) theory on diffusions of innovation (i.e. Early Adopters, Early Majority, Late Majority, and Laggards), this study uses data relating to 89 non-European Union countries over the 2003–2014 period. Our proposition is based on theoretical and empirical evidence that suggests that country-level IFRS adoption decisions are a function of a country's institutional environment, including the level of corruption. The findings show that the level (control) of corruption is negatively (positively) associated with a country's (i) speed and (ii) extent of IFRS adoption.
IFRS, diffusion of innovations theory, legal origin, macroeconomic factors, national corruption
1-22
El-Helaly, Moataz
9ad0ad1b-4aa0-4467-ae5b-d492face9470
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Al-Gazzar, Manar
8b18bd52-1c2c-4730-ba84-03df396ab116
5 March 2020
El-Helaly, Moataz
9ad0ad1b-4aa0-4467-ae5b-d492face9470
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Al-Gazzar, Manar
8b18bd52-1c2c-4730-ba84-03df396ab116
El-Helaly, Moataz, Ntim, Collins and Al-Gazzar, Manar
(2020)
Diffusion theory, national corruption and IFRS adoption around the world.
Journal of International Accounting, Auditing and Taxation, 38, , [100305].
(doi:10.1016/j.intaccaudtax.2020.100305).
Abstract
International financial reporting standards (IFRS) have been widely adopted around the world. However, while there is a lot of evidence on the economic consequences of IFRS adoption (e.g. foreign direct investments; development of financial markets; financial accounting quality; access to capital; and stock market liquidity), especially at the firm-level, few studies examine the national factors that may impede or facilitate the adoption of IFRS at the country-level. This paper seeks to make two new contributions to the extant international accounting literature by examining the influence of national corruption on the (i) speed and (ii) extent of IFRS adoption around the world. Relying on Rogers's (1962) theory on diffusions of innovation (i.e. Early Adopters, Early Majority, Late Majority, and Laggards), this study uses data relating to 89 non-European Union countries over the 2003–2014 period. Our proposition is based on theoretical and empirical evidence that suggests that country-level IFRS adoption decisions are a function of a country's institutional environment, including the level of corruption. The findings show that the level (control) of corruption is negatively (positively) associated with a country's (i) speed and (ii) extent of IFRS adoption.
Text
Accepted_JIAAT_1_Jan_2020
- Accepted Manuscript
More information
Accepted/In Press date: 1 January 2020
e-pub ahead of print date: 5 March 2020
Published date: 5 March 2020
Additional Information:
Funding Information:
The authors gratefully acknowledge the insightful and timely suggestions by the Editor-in-Chief, Professor Robert Larson, and two anonymous reviewers. We thank Gary Biddle, Suresh Radhakrishnan, Stephen Salter, Thorsten Sellhorn, and Mark Soliman for their useful comments. We also acknowledge useful comments received at presentations at the 2017 African Accounting and Finance Association Conference, Nairobi, Kenya, 2019 African Accounting and Finance Association Conference, Dar es Salaam, Tanzania, and research seminars at the American University Cairo in 2016, Egypt, American University Beirut in 2016, Lebanon, Brunel University London in 2020, UK, De Montfort University in 2017, UK, University of Durham in 2018, UK, University of Hull in 2017, UK, and University of Southampton in 2016, UK.
Publisher Copyright:
© 2020 Elsevier Inc.
Keywords:
IFRS, diffusion of innovations theory, legal origin, macroeconomic factors, national corruption
Identifiers
Local EPrints ID: 436710
URI: http://eprints.soton.ac.uk/id/eprint/436710
ISSN: 1061-9518
PURE UUID: 222d3d15-ac38-47cc-abfa-9fae4a5e1beb
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Date deposited: 03 Jan 2020 11:01
Last modified: 17 Mar 2024 05:11
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Author:
Moataz El-Helaly
Author:
Manar Al-Gazzar
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