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

Onali, Enrico; Ginesti, Gianluca; Ballestra, Luca Vincenzo

Authors

Enrico Onali

Gianluca Ginesti

Luca Vincenzo Ballestra



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).

Citation

Onali, E., Ginesti, G., & Ballestra, L. V. (2017). Investor reaction to IFRS for financial instruments in Europe: the role of firm-specific factors. Finance Research Letters, 21, https://doi.org/10.1016/j.frl.2017.01.002

Journal Article Type Article
Acceptance Date Jan 9, 2017
Online Publication Date Jan 10, 2017
Publication Date May 1, 2017
Deposit Date Jun 19, 2018
Publicly Available Date Mar 29, 2024
Journal Finance Research Letters
Print ISSN 1544-6123
Electronic ISSN 1544-6123
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 21
DOI https://doi.org/10.1016/j.frl.2017.01.002
Keywords Market reaction; Event study; IFRS 9; Information asymmetry; Information quality
Public URL https://nottingham-repository.worktribe.com/output/969588
Publisher URL https://www.sciencedirect.com/science/article/pii/S1544612317300235

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