Purpose- The purpose of this paper is to investigate the impact of IFRS adoption on stock prices in 5 countries which have adopted IFRS 2012 compared with the stock prices in 4 countries which have not adopted IFRS at all.
Design/methodology/approach – The authors have collected numeric and secondary data from 45 firms from 9 countries to conduct the empirical study. Thus, the research strategy is quantitative, and the approach is deductive. Data analyzing is done by using a statistical program called STATA. The authors have used the Difference in Difference model.
Findings and conclusion- The study has shown that the effect of IFRS adoption on stock prices is insignificant in the countries which have adopted IFRS 2012. The change in stock prices of the two groups of countries is insignificant. Stock prices have increased in some countries and at the time it has decreased in other countries regardless whether the countries mandated IFRS or not. The study has also found log profit and dividend per share have a significant impact on the stock prices. The study also has found log profit and dividend per share have decreased after compliance with IFRS.
Paper type- Quantitative/Explanatory paper.
Originality/Value-This study contributes to the field of the impact of IFRS adoption on the stock prices. The paper provides insight from an international perspective. IFRS adoption on stock prices in most of our sample countries have been studied for the first time.