Does Public Firms' Mandatory IFRS Reporting Crowd Out Private Firms' Capital Investment?

• 成果类型: Article
• 署名作者: Liu, Jiancheng (Duncan); Shi, Wei; Zeng, Cheng; Zhang, Guochang
• 署名单位: University of Macau; Deakin University; Hong Kong Polytechnic University; University of Hong Kong
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12494
• 发表日期: 2023
• 页码: 1263-1312
• 关键词: accounting quality; Information environment; economic consequences; Disclosure regulation; earnings management; adoption improve; MARKET; decisions; debt; cost

摘要

We investigate how the mandatory adoption of International Financial Reporting Standards (IFRS) by publicly listed firms in the European Union affects peer private firms. We find that private firms' capital investment decreases significantly after the IFRS mandate, relative to public firms. Private firms also display decreased investment when benchmarked against firms relatively insulated from the impact of the IFRS mandate, but the magnitude of the effect is smaller in this case. These results are consistent with the hypothesis that mandatory IFRS reporting (combined with other reforms), while increasing public firms' financing and investment, crowds out funding for private firms. The effect is more pronounced for larger private firms and in industries where public peers have greater external financing needs. Our evidence suggests that financial reporting regulations cause shifts in resource allocation in an economy.