Does IFRS convergence promote corporate innovation? Preliminary evidence from China

Min Zhang, Yaqian Wu, Lijing Tong and Yingwen Deng

Asia-Pacific Journal of Accounting & Economics, 2022, vol. 29, issue 1, 255-274

Abstract: Using a sample of Chinese A-share and H-share firms, this study examines the influence of International Financial Reporting Standards (IFRS) convergence on corporate innovation. Empirical results show that compared with H-share firms not affected by IFRS convergence, A-share firms engage more in innovative activities during the post-convergence period. Further analyses show the positive effect of IFRS convergence on corporate innovation only exists in firms with high information asymmetry before IFRS convergence; improving information environment is the mechanism through which IFRS convergence affects corporate innovation. This study contributes to the literature on disclosure regulations in emerging markets and enriches academic understanding of the real effects of IFRS convergence.

Date: 2022
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DOI: 10.1080/16081625.2019.1673185

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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