Accounting Standards Harmonization and Financial Integration

Dan Dhaliwal, Wen He, Yan Li, Raynolde Pereira

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We empirically examine whether adopting a uniform set of accounting standards mitigates information frictions in financial markets and facilitates market integration. Using a difference-in-difference design, we find that after the mandatory adoption of IFRS local stock returns incorporate more global information and at a faster speed. The effect of IFRS adoption is stronger in countries where there are larger improvements in accounting comparability and for firms with a larger increase in foreign ownership. Overall, our results suggest that accounting standards harmonization facilitates financial market integration.

Original languageEnglish (US)
Pages (from-to)2437-2466
Number of pages30
JournalContemporary Accounting Research
Volume36
Issue number4
DOIs
StatePublished - Dec 1 2019

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Accounting Standards Harmonization and Financial Integration'. Together they form a unique fingerprint.

Cite this