Abstract
The process of accounting harmonisation via International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) adoption is very widespread, and it is still involving a huge number of countries all over the world.Previous academic literature investigated the impact of this process from different perspectives, such as the quality of financial reports, the transparency of financial disclosures, the liquidity of the financial markets and the cost of equity.The aim of this article is to contribute to the research stream exploring the effects of IAS/IFRS adoption, investigating if accounting harmonisation through the IAS/IFRS has had an impact on the internationalisation process. To achieve our objective, two multiple linear regression analyses are presented. The first one focuses on the impact of the adoption of IAS/IFRS on foreign direct investments (FDIs) using data collected from a sample of 34 Organisation for Economic Co-Operation and Development (OECD) member countries. The second statistical analysis investigates the influence of IAS/IFRS adoption on cross-border mergers and acquisitions (M&A), considering operations carried out by European-listed companies towards target companies located in the 34 OECD member countries. The FDIs and cross-border M&A are considered proxies of the internationalisation process.Preliminary results show that the adoption of IAS/IFRS has positively affected FDI flows and increased the value of cross-border M&A.This study has tried to provide theoretical contributions to the literature stream about the effects of the harmonisation process with IAS/IFRS adoption, showing the beneficial impact they may have on the internationalisation process. Moreover, our findings can be useful for policymakers and managers, suggesting that becoming IAS/IFRS adopters can facilitate the internationalisation process of the companies.
Highlights
The difference in accounting rules is a very big problem for international investors because they have to bear more costs to correctly understand the financial reports of companies operating in different countries (Nobes et al, 2008).In academic literature, various studies were made to explain why accounting systems are different among countries (Choi & Meek, 2008; Radebaught et al, 2006)
Our preliminary results show that the adoption of IAS/IFRS positively affects foreign direct investments (FDIs) flows and the value of cross-border mergers and acquisitions (M&A)
We wanted to explore the impact of IFRS adoption on FDIs, while with the second one we wished to investigate the relation among IFRS adoption and cross-border M&A operations
Summary
The difference in accounting rules is a very big problem for international investors because they have to bear more costs to correctly understand the financial reports of companies operating in different countries (Nobes et al, 2008).In academic literature, various studies were made to explain why accounting systems are different among countries (Choi & Meek, 2008; Radebaught et al, 2006). The difference in accounting rules is a very big problem for international investors because they have to bear more costs to correctly understand the financial reports of companies operating in different countries (Nobes et al, 2008). In order to try to solve this trouble, the International Accounting Standard Board (IASB) has issued the International Accounting Standards/International Financial Reporting Standards (IAS/IFRS).
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