TY - JOUR
T1 - Investor reaction to IFRS for financial instruments in Europe
T2 - the role of firm-specific factors
AU - Onali, Enrico
AU - Ginesti, Gianluca
AU - Ballestra, Luca Vincenzo
PY - 2017/5
Y1 - 2017/5
N2 - 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).
AB - 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).
KW - market reaction
KW - event study
KW - IFRS 9
KW - information asymmetry
KW - information quality
UR - http://www.scopus.com/inward/record.url?scp=85009792194&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2017.01.002
DO - 10.1016/j.frl.2017.01.002
M3 - Article
AN - SCOPUS:85009792194
SN - 1544-6123
VL - 21
SP - 72
EP - 77
JO - Finance Research Letters
JF - Finance Research Letters
ER -