publication . Other literature type . Article . 2014

Network Effects in Countries' Adoption of IFRS

Karthik Ramanna; Ewa Sletten;
Open Access
  • Published: 01 Jul 2014
  • Publisher: American Accounting Association
  • Country: United States
If the differences in accounting standards across countries reflect relatively stable institutional differences (e.g., auditing technology, the rule of law, etc.), why did several countries rapidly, albeit in a staggered manner, adopt IFRS over local standards in the 2003–2008 period? We test the hypothesis that perceived network benefits from the extant worldwide adoption of IFRS can explain part of countries' shift away from local accounting standards. That is, as more jurisdictions with economic ties to a given country adopt IFRS, perceived benefits from lowering transactions costs to foreign financial-statement users increase and contribute significantly tow...
free text keywords: Economics and Econometrics, Accounting, Finance, financial reporting, network effects, Extant taxon, Accounting standard, European union, media_common.cataloged_instance, media_common, International accounting, Harmonization, business.industry, business, Data availability, Alternative hypothesis
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