Firm value and market liquidity around the adoption of common accounting standards

• 成果类型: Article
• 署名作者: Gao, Pingyang; Jiang, Xu; Zhang, Gaoqing
• 署名单位: University of Chicago; Duke University; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.11.001
• 发表日期: 2019
• 关键词: ifrs; INFORMATION; disclosure; earnings

摘要

The adoption of common accounting standards generates both a precision effect and a network effect. When firms use common standards, investors can leverage their knowledge about the standards to process more financial reports. Embedding both effects into the economic framework of Baiman and Verrecchia (1995, 1996), we study the adoption's effects on reporting precision, firm value, and liquidity of both the switcher and the early adopter. The model helps address the identification challenge and reconcile some existing results in the empirical literature on IFRS adoption. It also generates implications for standardizing disclosure and accounting methods.