Abstract

http://ssrn.com/abstract=2147838
 


 



Financial Reporting Regulation, Information Asymmetry and Financing Decisions around the World


Patricia L. Naranjo


Massachusetts Institute of Technology (MIT) - Sloan School of Management

Daniel Saavedra


Massachusetts Institute of Technology (MIT) - Sloan School of Management

Rodrigo S. Verdi


Massachusetts Institute of Technology (MIT)

July 07, 2013


Abstract:     
We study the influence of a major reform in financial reporting regulation – the adoption of the International Financial Reporting Standards (IFRS) – on financial decisions around the world. We find that post-IFRS: (i) firms are more likely to raise external financing and (ii) firms increase their use of equity capital if they experience a decrease in information asymmetry, operate in a high growth industry, or have high financial distress. Our findings highlight the importance of financial reporting regulation in explaining financing policies around the world.

Number of Pages in PDF File: 54

Keywords: Financing Decisions, Information Asymmetry, Capital Structure, Pecking Order, International Accounting, IAS, IFRS

JEL Classification: G15, G30, G32, M41

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Date posted: September 17, 2012 ; Last revised: July 8, 2013

Suggested Citation

Naranjo, Patricia L. and Saavedra, Daniel and Verdi, Rodrigo S., Financial Reporting Regulation, Information Asymmetry and Financing Decisions around the World (July 07, 2013). Available at SSRN: http://ssrn.com/abstract=2147838 or http://dx.doi.org/10.2139/ssrn.2147838

Contact Information

Patricia L. Naranjo
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
100 Main Street
E62-676
Cambridge, MA 02142
United States
Daniel Saavedra
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
77 Massachusetts Ave.
E62-416
Cambridge, MA 02142
United States
Rodrigo S. Verdi (Contact Author)
Massachusetts Institute of Technology (MIT) ( email )
Sloan School of Management
100 Main Street E62-679
Cambridge, MA 02142
United States
(617) 253 2956 (Phone)
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