Research question


Main findings

André, Filip and Marmousez (2014) [4]

・ Examine the relationship between conservatism, a dimension of financial reporting quality, and investment efficiency.

・ Test whether a higher degree of conservatism, and of financial reporting, is associated with a greater investment efficiency, or with lower over- or under-investment.

・ Sample of French firms with 787 using French GAAP and 839 using IFRS.

・ Conservatism significantly declines after the move to IFRS.

・ In the pre-IFRS period, conservatism limits over- or underinvestment.

・ The quality of accruals (financial reporting quality), plays an important role over the whole study period (pre- and post-IFRS) in disciplining investment, and this role grows with the adoption of IFRS.

Banker, Huang, and Li (2014) [6]

・ Examine whether productivity improves after mandatory IFRS adoption.

・ Sample of mandatory IFRS adopters of 16 countries and 9485 firm year observations and voluntary IFRS adopters of 15 countries of 49,345 firm year observations.

・ Production efficiency of mandatory IFRS adopters increases significantly after mandatory IFRS adoption.

・ Firms located in countries with large GAAP differences, firms exhibiting a decrease in stock return volatility and analyst forecast dispersion and firms experiencing a large increase in the number of comparable industry peer, in the post IFRS adoption improve more the production efficiency.

・ Firms with significant improvements in their information environment from mandatory IFRS adoption are able to increase productivity substantially.

Chen, Young, and Zhuang (2013) [5]

・ Examine the externalities of mandatory IFRS adoption on firms’ investment efficiency.

・ Examine whether mandatory IFRS adoption in Europe enhances the spillover effects of foreign peers’ accounting information on the firm’s investment efficiency.

・ Sample of 17 European countries in 8857 firm year observations from 2000 to 2009.

・ Firms’ investment efficiency improves following IFRS adoption.

・ The spillover effect of a firm’s ROA difference versus its foreign peers, but not domestic peers, on the firm’s investment efficiency increases after IFRS adoption.

・ IFRS adoption improving information comparability and disclosure enable managers and investors to use accounting information of foreign peers more effectively. Such improved information can help managers to make better investment decisions and help investors to effectively evaluate and monitor firms’ investment.

Lenger, Ernstberger and Stiebale (2011) [3]

・ Examines the impact of adopting IFRS on European public and private firms’ investment efficiency.

・ Sample of 10 countries of EU with 142,873 firms and 951,650 firm year observations from 1998 to 2008.

・ Mandatory IFRS application has more pronounced effects for public firms’ investment efficiency and benefits are higher for public firms in a.

・ The impact of the IFRS adoption combined also with the enforcement influence positively the financial reporting system and as a result the firms’ investment efficiency.

Ramos (2008) [1]

・ Study the importance of accounting harmonization on foreign activities from a macroeconomic perspective, by focusing on the importance of European accounting harmonization on international trade and foreign direct investments (FDI).

・ Sample 27 EU countries plus United States, China, Japan, EFTA members and Croatia, Turkey from 1999 to 2007 as well as data on bilateral FDI flows (namely investments by resident entities in affiliated enterprises abroad) for 1999 to 2006.

・ IFRS adoption benefit and FDI.

・ Positive effect of adopting uniform accounting standards on foreign activities in Europe is higher in transition economies.