Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/27228

TitleEquity offerings abroad and the adoption of IFRS : a test of the capital markets liability of foreignness
Author(s)Loureiro, Gilberto
Taboada, Alvaro G.
Issue date2013
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Abstract(s)We examine how the reduction in information asymmetry brought about by the adoption of International Financial Reporting Standards (IFRS) affects the adverse selection costs of issuing equity at home and abroad. In particular, we examine whether there has been a reduction in the costs of raising equity in foreign markets- the capital markets liability of foreignness (CMLOF). Consistent with the view that mandatory IFRS adoption reduces information asymmetry, we find an increase in equity issues following IFRS adoption. In addition, we find an increase in the probability of firms issuing equity (and in the amount of equity raised) in foreign markets following IFRS adoption, suggesting a reduction in CMLOF costs. These results are more pronounced for smaller firms, with lower analyst coverage, and for firms with more need of external finance. Finally, we find lower adverse reaction to the announcement of equity offerings in foreign markets following IFRS adoption.
TypeWorking paper
URIhttp://hdl.handle.net/1822/27228
Publisher versionhttp://www.nipe.eeg.uminho.pt/Uploads/NIPE_WP_21_2013.pdf
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

Files in This Item:
File Description SizeFormat 
NIPE_WP_21_2013.pdfNIPE WP-21/20131,22 MBAdobe PDFView/Open

Partilhe no FacebookPartilhe no TwitterPartilhe no DeliciousPartilhe no LinkedInPartilhe no DiggAdicionar ao Google BookmarksPartilhe no MySpacePartilhe no Orkut
Exporte no formato BibTex mendeley Exporte no formato Endnote Adicione ao seu ORCID