Adoption of international accounting standards and performance of emerging capital markets

Abstract

Purpose

The purpose of this paper is to examine empirically the association between the adoption of international accounting standards (IAS/IFRS) and the performance of emerging capital markets.

Design/methodology/approach

Data related to 31 developing countries with capital markets were used. The authors performed univariate analyses (means comparison before and after the use of IAS/IFRS), as well as multivariate analyses (estimation of models of panel data), to test the hypothetical relations set up in the paper.

Findings

The results suggest that the performance of emerging capital markets is significantly and positively associated with IAS/IFRS use. They are consistent with several empirical investigations which highlighted the relevance of financial information under IAS/IFRS in emerging capital markets.

Practical implications

Several organizations and decision-makers including the IASB, governments, capital markets regulators and international investors should find the policy implications of this paper very meaningful.

Originality/value

To the best of the authors’ knowledge, the relationship between the use of IAS/IFRS and the performance of emerging capital markets based on a group of countries has not yet been explored.

Citation

Mhedhbi, K. and Zeghal, D. (2016), "Adoption of international accounting standards and performance of emerging capital markets", Review of Accounting and Finance, Vol. 15 No. 2, pp. 252-272. https://doi.org/10.1108/RAF-08-2013-0099