An Investigation Of The Comparative Impact Of Degree Of Implementation Of IFRS Upon The Public And Private Information Quality Of Asia Pacific Country Firms

Abstract

This research investigates the comparative quality of public and private information environments between firms domiciled in 15 Asia Pacific countries of which seven are characterized as market supportive institutional infrastructure. Our empirical analyses examine the comparative quality of public and private information components of equity securities analysts’ earnings forecasts for Asia Pacific firms, while controlling for firms cross-listing on U.S. equity securities exchanges and country of domicile degree of implementation of IFRS. Our results indicate that the quality of private information is higher for non-market supportive infrastructure countries, as compared to market-supportive infrastructure countries of domicile, and the quality of public information is higher for market-supportive infrastructure as compared to non-market-supportive infrastructure countries of domicile. Furthermore, and particularly noteworthy, is that our results indicate that country of domicile degree of implementation of IFRS increases the quality of public information and decreases the quality of private information for both market-supportive infrastructure and non-market-supportive infrastructure countries of domicile, and also that the decrease in the quality of private and increase in the quality of public information associated with degree of implementation of IFRS are significantly more pronounced for market-supportive infrastructure countries relative to non-market-Supportive infrastructure countries of domicile. We believe that our results suggest that IFRS is more beneficial for countries having market supportive institutional infrastructure in place as compared with those who do not.