Authors: Godfred Matthew Yaw Owusu; Susela Devi K. Suppiah; Nur Ashikin Mohd Saat; Siong Hook Law
Addresses: Department of Accounting, University of Ghana Business School, Legon-Accra, Ghana ' Department of Accounting, Sunway University Business School, Sunway University, Bandar Sunway 47500, Selangor, Malaysia ' Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 Serdang, Malaysia ' Department of Accounting and Finance, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 Serdang, Malaysia
Abstract: We examine whether the adoption of International Financial Reporting Standards (IFRS) affects economic growth in developing economies and investigate the role that country-level institutional quality plays in the relationship. Using a panel data averaged over three non-overlapping years, from the period 1996 to 2013, for 78 developing countries and employing the efficient two-step system generalised methods of moment (GMM) estimation technique; we find that countries that adopt IFRS experience better economic growth than non-adopting countries. Our results also demonstrate that good institutions moderate the IFRS-economic growth nexus. Taken together, these findings suggest that IFRS adoption has important implications for economic growth.
Keywords: International Financial Reporting Standards; IFRS; economic growth; developing economies; generalised methods of moment; GMM; institutional quality; foreign direct investment; FDI; principal component analysis; accounting standards; system GMM; accounting systems.
International Journal of Economics and Accounting, 2022 Vol.11 No.1, pp.73 - 98
Accepted: 05 Feb 2021
Published online: 01 Dec 2021 *