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- Title
The Mediating Effect of Information Asymmetry on IFRS and Foreign Direct Investment.
- Authors
YOUSEFINEJAD, MARYAM; AHMAD, AZLINA; SALLEH, FAIRUZ MD; RAHIM, RUZITA ABDUL; AZAM, HAFIZH MD
- Abstract
This study examines the mediating effect of information asymmetry on the relationship between IFRS and FDI inflows in ASEAN countries. The hypotheses were empirically tested using a sample of ASEAN 6 from 2001 to 2016 and for information asymmetry measurement, this study applies Bid-ask spread and Illiquidity measurement introduced by Amihud (2002). This study also fulfils the three steps required for mediation analyses based on casual steps approach. The results indicate that information asymmetry mediates the relationship between IFRS and FDI inflows. Additionally, this study also demonstrates that IFRS adoption is a determinant factor for FDI inflows and eventually economic growth. This study provides evidence regarding the outcomes of IFRS from the aspects of information asymmetry reduction and FDI inflows enhancement. Therefore, the outcomes of this study may be useful for adopter and non-adopter countries to understand the economic consequences of IFRS. The findings may provide important inputs to policy makers of Indonesia and Vietnam who are contemplating adopting IFRS. The positive relationship between IFRS and FDI inflows, provides evidence that IFRS is an important determinant of FDI inflows and eventually economic growth.
- Subjects
VIETNAM; INDONESIA; ASEAN; INFORMATION asymmetry; FOREIGN investments; SPREAD (Finance); INFORMATION measurement; ECONOMIC impact
- Publication
International Journal of Economics & Management, 2018, Vol 12, Issue 2, p641
- ISSN
1823-836X
- Publication type
Article