Cookies

We use cookies to ensure that we give you the best experience on our website. You can change your cookie settings at any time. Otherwise, we'll assume you're OK to continue.

Events

Diffusion Theory, National Corruption and IFRS Adoption around the World

Wednesday, 18 April 2018
13:45
Professor Collins Ntim, Southampton Business School

An Ethical Finance, Accountability and Governance Seminar.

Abstract: International financial reporting standards (IFRS) have been adopted widely around the world. However, whilst there has been a considerable amount of evidence on the economic consequences/effects of IFRS adoption (e.g., foreign direct investments, development of financial markets, financial accounting quality, access to capital, and stock market liquidity), especially at the firm-level, studies examining the national factors that may impede or facilitate the adoption of IFRS at the country-level are rare.

Therefore, and distinctively relying on Rogers’ (1962) theory of diffusion of innovation (i.e., early adopters, early majority, late majority and laggards), this paper seeks to make two new contributions to the extant international accounting literature by examining the influence of national corruption on the (i) speed and (ii) extent IFRS adoption around the world. Using one of the largest datasets to date on IFRS adoption, and corruption, consisting of 89 non-EU countries from 2003 to 2014 (i.e., over 1,000 observations), we find that the level of corruption has a negative effect on both the (i) speed and (ii) extent of IFRS adoption around the world. We show that our evidence is largely robust to controlling for a wide range of country level factors (e.g., macro-economic factors and legal origin), alternative measures and potential endogeneity problems. We interpret our findings within the predictions of Rogers’ (1962) theory of diffusion of innovation.

Collins Ntim is a Professor of Accounting and Head of Department of Accounting, Southampton Business School, University of Southampton. His research focuses on interrelationships among accounting, finance, governance and development. He has published widely in the mainstream accounting, finance, business and management journals, as well as won competitive external research grant from bodies, such as the Economic and Social Research Council, UK. Collins is the founding editor of Cogent Accounting, Corporate Governance and Business Ethics (Taylor Francis), and is also currently editing a special issue on 'African accounting and development' for the Critical Perspective on Accounting (ABS 3*)