Investor reaction to IFRS for financial instruments in Europe:the role of firm specific factors


We examine the market reaction to events related to the standard-setting process of International Financial Reporting Standard (IFRS) 9 for over 3,000 European firms that have adopted IFRS. We find that the market reaction to IFRS 9 is largely affected by firm-specific factors associated with information quality and information asymmetry. In particular, lower information asymmetry and higher information quality have a positive effect on market-adjusted returns. This is in conflict with the common view that IFRS 9 will improve accounting quality for those firms that need it most (namely, small firms with low liquidity and concentrated ownership structure).

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Divisions: Aston Business School
Uncontrolled Keywords: market reaction,event study,IFRS 9,information asymmetry,information quality,Finance
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2017-01-10
Published Online Date: 2017-01-10
Accepted Date: 2017-01-09
Submitted Date: 2016-04-14
Authors: Onali, Enrico ( 0000-0003-3723-2078)
Ginesti, Gianluca
Ballestra, Luca Vincenzo



Version: Accepted Version

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