'Who Has Benefited the Most From the Adoption of Ifrs in France?' - Qui a le plus profité de l’adoption des IFRS en France?

Abstract

Several studies show that mandatory IFRS adoption resulted in positive capital market impacts for both investors (higher stock liquidity and lower information asymmetry) and firms (lower cost of equity capital). However, the observed impacts are only mean impacts since the characteristics of IFRS adopters are generally ignored. This study aims to fill that gap. Focusing on information asymmetry, we find that French firms did not benefit identically from IFRS adoption. The adoption of the new accounting standards resulted in lower information asymmetry for firms with high analyst following, high voluntary disclosures, and highly specific assets and activities. In contrast, IFRS adoption resulted in higher information asymmetry for firms with low analyst following and low voluntary disclosures. It had no impact on firms with non-specific assets. Surprisingly, we also show that IFRS adoption worsened information asymmetry for firms that suffered from high information asymmetry prior to the adoption of IFRS. Conversely, and paradoxically, firms that had the least to expect from IFRS, because of weak asymmetry prior to the adoption, benefitted the most from the adoption.

Keywords: IFRS Adoption, France, Information Asymmetry