The effect of IFRS on IPO activities throughout the world
Item
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Title
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The effect of IFRS on IPO activities throughout the world
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Identifier
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d_2009_2013:24c8b9489b6d:11911
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identifier
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12566
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Creator
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Suh, Jangwon,
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Contributor
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Masako Darrough
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Date
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2013
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Language
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English
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Publisher
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City University of New York.
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Subject
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Accounting | Finance | Comparability | Global IPO | IFRS | IPO Underpricing | Reporting quality
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Abstract
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This dissertation consists of three essays. The first essay discusses IPO procedures and literature on IPO underpricing. The second essay examines the impact of International Financial Reporting Standards (IFRS) on IPO underpricing in an international setting. Controlling for firms' choice of accounting standards, I find that IPO underpricing is lower for IPO firms using IFRS than those using domestic GAAP. In particular, I show that the impact of IFRS on IPO underpricing is larger for IPO firms listed in stronger enforcement jurisdictions. Focusing on comparability, I show that the use of IFRS reduces IPO underpricing compared with domestic GAAP because IFRS allow for a greater degree of comparability (i.e., a larger number of listed industry peers using the same accounting standards). However, the benefit of enhanced comparability from IFRS arises only when these industry peers are themselves listed in jurisdictions with high-quality enforcement. That is to say, high-quality enforcement is critical in enhancing the overall benefit of increased comparability under IFRS.;The third essay examines global integration of accounting standards and firms' cross-listing decisions. Global capital markets are highly fragmented; however, the widespread adoption of a single set of global accounting standards - International Financial Reporting Standards (IFRS) - may broaden the horizons of cross-border capital markets. Specifically, this paper examines, partitioning sample IPO firms that use IFRS into voluntary and mandatory IFRS adopters, whether their decision to list abroad is different from that of matched IPO firms that use domestic GAAP. Results show that compared with matched IPO firms, voluntary IFRS adopters show (1) a decreasing likelihood of listing abroad to raise a large amount of proceeds, (2) a increasing likelihood of listing abroad to bond to credible disclosure practices in a foreign country, (3) a decreasing likelihood of listing abroad in the face of a small number of local industry peers that use the same set of accounting standards. Results of changes in these likelihoods following mandatory IFRS adoption are mixed or weaker than those using voluntary IFRS adopter sample. In addition, I find that the large number of foreign IFRS-reporting industry peers encourages IFRS-reporting IPO firms, in both voluntary and mandatory adopter samples, to list abroad. These results provide evidence of how the worldwide adoption of IFRS changes firms' cross-border listing decisions throughout the world.
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Type
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dissertation
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Source
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2009_2013.csv
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degree
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Ph.D.
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Program
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Business
