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Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries

This study investigates the causal relationship between International Financial Reporting Standard (IFRS) adoption and Foreign Direct Investment (FDI) inflows in ASEAN countries during the period of 2001 to 2016. This study applies panel co-integration and causality test to examine the short and lon...

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Main Authors: Yousefinejad, Maryam, Azlina Ahmad,, Fairuz Md. Salleh,, Ruzita Abdul Rahim,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2018
Online Access:http://journalarticle.ukm.my/19723/1/28738-91513-1-PB.pdf
http://journalarticle.ukm.my/19723/
https://ejournal.ukm.my/ajac/issue/view/1139/showToc
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spelling my-ukm.journal.197232022-09-15T01:41:01Z http://journalarticle.ukm.my/19723/ Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries Yousefinejad, Maryam Azlina Ahmad, Fairuz Md. Salleh, Ruzita Abdul Rahim, This study investigates the causal relationship between International Financial Reporting Standard (IFRS) adoption and Foreign Direct Investment (FDI) inflows in ASEAN countries during the period of 2001 to 2016. This study applies panel co-integration and causality test to examine the short and long run and causal relationship between variables. IFRS adoption was measured based on dummy variable in Model 1 and level of IFRS compliance in Model 2. Findings of this study confirm the presence of co-integration between variables and the Dynamic Ordinary Least Square (DOLS) estimation analysis reveals positive and significant relationship between IFRS adoption, based on both measures and FDI inflows. Furthermore, the causality test shows that there is short run causality from IFRS to FDI inflows and long run causality between variables. This study extends knowledge on the relationship between IFRS adoption and FDI inflows by examining this relationship in the setting of ASEAN countries. Findings of this study could be useful for countries which are IFRS adopter and also non-adopters to understand the economic consequences of IFRS adoption, in their effort to attract more investors so as to accelerate economic growth. Penerbit Universiti Kebangsaan Malaysia 2018 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/19723/1/28738-91513-1-PB.pdf Yousefinejad, Maryam and Azlina Ahmad, and Fairuz Md. Salleh, and Ruzita Abdul Rahim, (2018) Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries. Asian Journal of Accounting and Governance, 10 . pp. 61-72. ISSN 2180-3838 https://ejournal.ukm.my/ajac/issue/view/1139/showToc
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description This study investigates the causal relationship between International Financial Reporting Standard (IFRS) adoption and Foreign Direct Investment (FDI) inflows in ASEAN countries during the period of 2001 to 2016. This study applies panel co-integration and causality test to examine the short and long run and causal relationship between variables. IFRS adoption was measured based on dummy variable in Model 1 and level of IFRS compliance in Model 2. Findings of this study confirm the presence of co-integration between variables and the Dynamic Ordinary Least Square (DOLS) estimation analysis reveals positive and significant relationship between IFRS adoption, based on both measures and FDI inflows. Furthermore, the causality test shows that there is short run causality from IFRS to FDI inflows and long run causality between variables. This study extends knowledge on the relationship between IFRS adoption and FDI inflows by examining this relationship in the setting of ASEAN countries. Findings of this study could be useful for countries which are IFRS adopter and also non-adopters to understand the economic consequences of IFRS adoption, in their effort to attract more investors so as to accelerate economic growth.
format Article
author Yousefinejad, Maryam
Azlina Ahmad,
Fairuz Md. Salleh,
Ruzita Abdul Rahim,
spellingShingle Yousefinejad, Maryam
Azlina Ahmad,
Fairuz Md. Salleh,
Ruzita Abdul Rahim,
Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
author_facet Yousefinejad, Maryam
Azlina Ahmad,
Fairuz Md. Salleh,
Ruzita Abdul Rahim,
author_sort Yousefinejad, Maryam
title Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
title_short Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
title_full Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
title_fullStr Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
title_full_unstemmed Causal relationship between International Financial Reporting Standard (IFRS) and Foreign Direct Investment (FDI) : a panel data analysis of ASEAN countries
title_sort causal relationship between international financial reporting standard (ifrs) and foreign direct investment (fdi) : a panel data analysis of asean countries
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2018
url http://journalarticle.ukm.my/19723/1/28738-91513-1-PB.pdf
http://journalarticle.ukm.my/19723/
https://ejournal.ukm.my/ajac/issue/view/1139/showToc
_version_ 1744354641079959552
score 13.211869

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