Investor reaction to IFRS for financial instruments in Europe: the role of firm-specific factors

Onali, Enrico and Ginesti, Gianluca and Ballestra, Luca Vincenzo (2017) Investor reaction to IFRS for financial instruments in Europe: the role of firm-specific factors. Finance Research Letters, 21 . pp. 72-77. ISSN 1544-6123

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Abstract

We examine the market reaction to events related to the standard-setting process of International Financial Reporting Standard (IFRS) 9 for over 3,000 European firms that have adopted IFRS. We find that the market reaction to IFRS 9 is largely affected by firm-specific factors associated with information quality and information asymmetry. In particular, lower information asymmetry and higher information quality have a positive effect on market-adjusted returns. This is in conflict with the common view that IFRS 9 will improve accounting quality for those firms that need it most (namely, small firms with low liquidity and concentrated ownership structure).

Item Type: Article
RIS ID: https://nottingham-repository.worktribe.com/output/969588
Keywords: Market reaction; Event study; IFRS 9; Information asymmetry; Information quality
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
Identification Number: https://doi.org/10.1016/j.frl.2017.01.002
Depositing User: Eprints, Support
Date Deposited: 19 Jun 2018 08:25
Last Modified: 04 May 2020 19:57
URI: http://eprints.nottingham.ac.uk/id/eprint/52487

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