Home and foreign host country IFRS adoption and cross-delisting

Kiridaran Kanagaretnam, Xiangting Kong () and Albert Tsang ()
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Xiangting Kong: Sun Yat-Sen University
Albert Tsang: The Hong Kong Polytechnic University

Journal of International Business Studies, 2020, vol. 51, issue 6, No 6, 1008-1033

Abstract: Abstract This study examines whether and how the mandatory adoption of international financial reporting standards (IFRS) affects a firm’s cross-delisting decision. Using a comprehensive sample of international cross-delistings, we show that mandatory IFRS adoption in the cross-listing host countries of multinational enterprises (MNEs) increases the delisting propensity of non-IFRS-reporting firms. In contrast, mandatory IFRS adoption in both home and host countries of cross-listing firms decreases the delisting propensity of MNEs in the post-IFRS period. The results of cross-sectional tests further suggest that the increased cross-delisting propensity for domestic GAAP-reporting firms post-IFRS adoption in foreign host countries is more pronounced for firms with a greater difference between domestic GAAP and IFRS. Overall, our results show the differential effects of IFRS adoption in home/host countries of MNEs on their cross-delisting decisions.

Keywords: mandatory IFRS adoption; delisting; cross-listing; analysts following; institutional ownership (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1057/s41267-019-00300-1

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