Home bias, foreign mutual fund holdings, and the voluntary adoption of international accounting standards

• 成果类型: Article
• 署名作者: Covrig, Vincentiu M.; DeFond, Mark L.; Hung, Mingyi
• 署名单位: California State University System; California State University Northridge; University of Southern California; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2007.00226.x
• 发表日期: 2007
• 页码: 41-70
• 关键词: stock characteristics; preferences

摘要

We test the assertion that a consequence of voluntarily adopting International Accounting Standards (IAS) is the enhanced ability to attract foreign capital. Using a unique database that reports firm-level holdings of over 25,000 mutual funds from around the world, our multivariate tests find that average foreign mutual fund ownership is significantly higher among IAS adopters. We also find that IAS adopters in poorer information environments and with lower visibility have higher levels of foreign investment, consistent with firms using IAS adoption to provide more information and/or information in a more familiar form to foreign investors. Taken together, our findings are consistent with voluntary IAS adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency.