Diffusion theory, national corruption and IFRS adoption around the world

El-Helaly M., NTIM C., Al-Gazzar M.

Journal of International Accounting, Auditing and Taxation, vol.38, 2020 (Scopus) identifier

  • Nəşrin Növü: Article / Article
  • Cild: 38
  • Nəşr tarixi: 2020
  • Doi nömrəsi: 10.1016/j.intaccaudtax.2020.100305
  • jurnalın adı: Journal of International Accounting, Auditing and Taxation
  • Jurnalın baxıldığı indekslər: Scopus, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, DIALNET
  • Açar sözlər: Diffusion of innovations theory, IFRS, Legal origin, Macroeconomic factors, National corruption
  • Açıq Arxiv Kolleksiyası: Məqalə
  • Adres: Bəli

Qısa məlumat

International financial reporting standards (IFRS) have been widely adopted around the world. However, while there is a lot of evidence on the economic consequences 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, few studies examine the national factors that may impede or facilitate the adoption of IFRS at the country-level. 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 of IFRS adoption around the world. Relying on Rogers's (1962) theory on diffusions of innovation (i.e. Early Adopters, Early Majority, Late Majority, and Laggards), this study uses data relating to 89 non-European Union countries over the 2003–2014 period. Our proposition is based on theoretical and empirical evidence that suggests that country-level IFRS adoption decisions are a function of a country's institutional environment, including the level of corruption. The findings show that the level (control) of corruption is negatively (positively) associated with a country's (i) speed and (ii) extent of IFRS adoption.