Design Innovation and Informational Transparency: International Evidence

50 Pages Posted: 29 Aug 2018 Last revised: 8 Dec 2021

See all articles by Peng-Chia Chiu

Peng-Chia Chiu

The Chinese University of Hong Kong, Shenzhen

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance

Feng Tian

Hong Kong Polytechnic University

Long Yi

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences

Date Written: December 7, 2021

Abstract

We examine the relation between information transparency and design innovation by using the mandatory adoption of International Financial Reporting Standards (IFRS) in 2005 as an exogenous increase in information transparency. We find that firms’ mandatory adoption of IFRS is positively related to their likelihood of winning the iF design award that acknowledges excellent product/service designs. We further find that after the adoption, firms attract more international institutional investors who may better monitor and advise product design; and that the effect of the IFRS mandate is more pronounced for firms with expanded international sales that may benefit more from international markets.

Keywords: International Financial Reporting Standards (IFRS); mandatory IFRS adoption; product development and design; institutional investors; globalization

JEL Classification: M41

Suggested Citation

Chiu, Peng-Chia and Hsu, Po-Hsuan and Tian, Feng and Yi, Long, Design Innovation and Informational Transparency: International Evidence (December 7, 2021). Available at SSRN: https://ssrn.com/abstract=3226197 or http://dx.doi.org/10.2139/ssrn.3226197

Peng-Chia Chiu (Contact Author)

The Chinese University of Hong Kong, Shenzhen ( email )

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance ( email )

101, Section 2, Kuang-Fu Road
Hsinchu, Taiwan 300
China

Feng Tian

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

Long Yi

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences ( email )

Hong Kong

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