International Financial Reporting Standards (IFRS) have recently been adopted in a number of jurisdictions, including the European Union. Despite the importance of IFRS in the context of global accounting standards harmonization, little is known regarding what institutional factors influence countries' decisions to voluntarily adopt IFRS. This issue is relevant to standard‐setters because a better understanding of the motivations for adoption will enable them to promote IFRS more effectively to countries that currently do not employ IFRS. Consistent with bonding theory, we find that countries with weaker investor protection mechanisms are more likely to adopt IFRS. Our evidence also shows that jurisdictions that are perceived to provide better access to their domestic capital markets are more likely to adopt IFRS. Taken together, our results are consistent with the view that IFRS represent a vehicle through which countries can improve investor protection and make their capital markets more accessible to foreign investors.
Skip Nav Destination
Research Article| January 01 2006
Empirical Evidence on Jurisdictions that Adopt IFRS
Online Issn: 1558-8025
Print Issn: 1542-6297
American Accounting Association
Journal of International Accounting Research (2006) 5 (2): 1–20.
- Views Icon Views
- Share Icon Share
- Search Site
Ole‐Kristian Hope, Justin Jin, Tony Kang; Empirical Evidence on Jurisdictions that Adopt IFRS. Journal of International Accounting Research 1 January 2006; 5 (2): 1–20. https://doi.org/10.2308/jiar.2006.5.2.1
Download citation file: