Assessing the Economic Impact of IFRS Adoption on Financial Transparency and Growth in the Arab Gulf Countries

Amer Morshed ()
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Amer Morshed: Financial and Accounting Science Department, Faculty of Business, Middle East University, Amman 11831, Jordan

Economies, 2024, vol. 12, issue 8, 1-16

Abstract: This paper examines the impact of adopting IFRS on economic growth and further development in the Arab Gulf countries, with a particular focus on Saudi Arabia, UAE, Qatar, Oman, Kuwait, and Bahrain. It, therefore, answers the research question of how IFRS adoption affects financial transparency, regulatory frameworks, and economic stability in general in oil-dependent economies. Using data from 2010 to 2020, the research uses regression models to test the influence of IFRS adoption on several key economic indicators. The results, thus, indicate that the adoption of IFRS considerably increases the level of transparency and, hence, enables the inflow of FDI as well, therefore ensuring economic growth. This result also sheds light on the critical roles that regulatory solid frameworks and political stability play in amplifying the benefits of IFRS adoption. However, family-based and state-owned enterprises’ resistance to increased demands for transparency is an issue that would provide a challenge. Implications for policy will be such that comprehensive reforms will be required with the countries’ regulatory frameworks, including more transparency and fitting the IFRS guidelines into local business practice and the cultural context. Future studies should also underscore sector-wise impact and go deeper into how cultural and institutional factors impact the effectiveness of implementing IFRS in the Arab Gulf region.

Keywords: FRS adoption; economic growth; Arab Gulf; financial transparency; regulatory frameworks; foreign direct investment (FDI) (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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