Purpose

This study is to examine the economic consequences of International Financial Reporting Standards (IFRS) converged standards by exploring its phased manner implementation in India.

Design/methodology/approach

The study measures the economic outcomes in the form of capital market reactions such as cost of equity capital, cost of debt capital, information asymmetry and market liquidity. Difference-in-difference (DiD) methodology has been used to analyze the data for this study.

Findings

Based on a sample of 2,685 Bombay Stock Exchange (BSE) listed firms, results show that the Indian capital market reacts negatively to the adoption of IFRS-converged standards. In particular, results show that the cost of equity capital, cost of debt capital and information asymmetry have been increased and market liquidity has been decreased for test firms relative to benchmark firms immediately after IFRS convergence and this negative effect is more pronounced among small firms than large firms. Subsequent tests suggest that test firms have better capital market reactions in the later year of implementation relative to benchmark firms that are implementing IFRS for the first time. It indicates the learning curve effect of IFRS on the economic outcomes as negative impact ameliorates over time.

Originality/value

The study is among earlier attempts to investigate the impact of IFRS on capital market reactions by exploring the phased manner implementation framework. The study is also among the pioneering attempts to examine the learning curve impact of IFRS on capital market reactions.

中文翻译：

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IFRS趋同的经济后果：来自印度分阶段实施的证据

目的

本研究旨在通过探索其在印度的分阶段实施方式来检验国际财务报告准则 (IFRS) 融合标准的经济后果。

设计/方法/途径

该研究以股权资本成本、债务资本成本、信息不对称和市场流动性等资本市场反应的形式衡量经济成果。差分差分 (DiD) 方法已用于分析本研究的数据。

发现

基于 2,685 家孟买证券交易所 (BSE) 上市公司的样本，结果表明印度资本市场对采用 IFRS 趋同准则反应消极。特别是，结果表明，在 IFRS 收敛后，测试公司相对于基准公司的股权资本成本、债务资本成本和信息不对称增加了，市场流动性降低了，这种负面影响在小公司中比在小公司中更为明显大公司。随后的测试表明，与首次实施 IFRS 的基准公司相比，测试公司在实施后一年的资本市场反应更好。它表明 IFRS 对经济结果的学习曲线效应，因为负面影响会随着时间的推移而改善。

原创性/价值

该研究是通过探索分阶段实施框架来调查 IFRS 对资本市场反应的影响的早期尝试之一。该研究也是研究国际财务报告准则对资本市场反应的学习曲线影响的开创性尝试之一。