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Diffusion theory, national corruption and IFRS adoption around the world

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, whilst 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’ (1962) theory on diffusions of innovation (i.e., early adopters, early majority, late majority, and laggards), this study uses data relating to 89 non-EU countries, collected 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, such as 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
1061-9518
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
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, 1-22, [100305]. (doi:10.1016/j.intaccaudtax.2020.100305).

Record type: Article

Abstract

International financial reporting standards (IFRS) have been widely adopted around the world. However, whilst 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’ (1962) theory on diffusions of innovation (i.e., early adopters, early majority, late majority, and laggards), this study uses data relating to 89 non-EU countries, collected 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, such as 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.

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Accepted/In Press date: 1 January 2020
e-pub ahead of print date: 5 March 2020
Published date: 5 March 2020
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
ORCID for Collins Ntim: ORCID iD orcid.org/0000-0002-1042-4056

Catalogue record

Date deposited: 03 Jan 2020 11:01
Last modified: 26 Nov 2021 02:27

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Contributors

Author: Moataz El-Helaly
Author: Collins Ntim ORCID iD
Author: Manar Al-Gazzar

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