Inward FDI, IFRS Adoption and Institutional Quality: Insights from the MENA Countries

Andrzej Cieślik and Sarhad Hamza
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Sarhad Hamza: Department of Business Administration, University of Raparin, Ranya 46012, Iraq

IJFS, 2022, vol. 10, issue 3, 1-19

Abstract: The adoption of International Financial Reporting Standards (IFRS) by 166 countries since 2004 has been a major achievement in the international standardization of accounting regulations. The present paper draws on the Eclectic Paradigm as the analytical framework to investigate the effects of IFRS adoption on foreign direct investment (FDI) inflows. The analysis is conducted based on panel data from 22 Middle Eastern and North African economies (MENA) between 1996 and 2019. The findings indicate that FDI inflows are positively associated with IFRS, and countries implementing the accounting standards receive a higher increase in FDI inflows. Furthermore, the results show that institutional quality plays an important role in attracting FDI. These results remain robust using lag and time-fixed effect estimation methods. The findings have several implications for policymakers.

Keywords: IFRS; institutional quality; MENA countries; PPML (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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