Abstract

http://ssrn.com/abstract=906802
 
 

References (52)



 
 

Citations (20)



 


 



Applying IFRS in Germany: Determinants and Consequences


Joachim Gassen


Humboldt University of Berlin - School of Business and Economics; Humboldt University of Berlin - Center for Applied Statistics and Economics (CASE)

Thorsten Sellhorn


WHU - Otto Beisheim School of Management

July 2006


Abstract:     
We address three research questions motivated by the recent ascent of International Financial Reporting Standards (IFRS) in Europe. First, analyzing the determinants of voluntary IFRS adoption by publicly traded German firms during the period 1998-2004, we find that size, international exposure, dispersion of ownership, and recent IPOs are important drivers. Second, using the results from this determinant model to construct propensity score-matched samples of IFRS and German-GAAP (HGB) firms, we document significant differences in terms of earnings quality: IFRS firms have more persistent, less predictable and more conditionally conservative earnings. Third, analyzing information asymmetry differences between IFRS and HGB firms, we show that IFRS adopters experience a decline in bid-ask spread of 70 base points and an average of 17 more days with price changes per year. On the other hand, IFRS adopter's stock prices seem to be more volatile. In the light of some important limitations of our study, we discuss IFRS-related research opportunities in post-2005 Europe.

Number of Pages in PDF File: 38

Keywords: IFRS, earnings quality, earnings attributes, information asymmetry, standard setting, IAS Regulation, Europe, propensity-score matching, voluntary disclosure

JEL Classification: G14, M41, M43, M44, M47

working papers series


Download This Paper

Date posted: June 7, 2006  

Suggested Citation

Gassen, Joachim and Sellhorn, Thorsten, Applying IFRS in Germany: Determinants and Consequences (July 2006). Available at SSRN: http://ssrn.com/abstract=906802 or http://dx.doi.org/10.2139/ssrn.906802

Contact Information

Joachim Gassen (Contact Author)
Humboldt University of Berlin - School of Business and Economics ( email )
Spandauer Str. 1
Berlin, D-10099
Germany
+49 30 2093 5764 (Phone)
+49 30 2093 5670 (Fax)
Humboldt University of Berlin - Center for Applied Statistics and Economics (CASE) ( email )
Spandauer Strasse 1
Berlin, D-10178
Germany
Thorsten Sellhorn
WHU - Otto Beisheim School of Management ( email )
Burgplatz 2
Vallendar, 56179
Germany
+49(0)261-6509230 (Phone)
+49(0)261-6509479 (Fax)
HOME PAGE: http://www.whu.edu/cms/?450&L=1
Feedback to SSRN


Paper statistics
Abstract Views: 11,518
Downloads: 3,834
Download Rank: 1,094
References:  52
Citations:  20

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.360 seconds