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The impact of IFRS Adoption
Transcript of The impact of IFRS Adoption
on the Stock Market-Growth Nexus
Causality between Finance and Growth
(Stock Market, Bond Market, Banking sector, and Insurance sector)
Stock Market Development
1. Does stock market development enhance economic growth?
2. Does IFRS adoption in stock markets influence the expected relationship of stock market-growth?
3. Is there any difference regarding the expected effect between developed and developing countries?
1. Investigating the relationship between stock market development and economic growth.
2. Examining the impact of IFRS adoption on the relationship
3. Differentiating developing and developed countries regarding the points.
H1. Stock market development will have a direct impact on economic growth
H1. Stock market development will have a direct impact on economic growth, which will be moderated by IFRS adoption.
Sample: Germany and Poland
Sources: Federal Reserve Bank and the Global Economy databases
IFRS Adoption In Europe
International Financial Reporting Standards
Europe has adopted since 2005
Test Hypothesis 1
Test Hypothesis 2
The study contributes significantly to the literature because of adding a new variable to the previously conducted model
limitations and recommendations:
the extent of generalizability (Germany and Poland)
this study does not consider the level of compliance to IFRS codes
Support Hypothesis 1
Support Hypothesis 2 BUT with different results for the direction
The findings suggest that stock market development has effected economic growth over 1993-2016 in both countries, but with different degree of impact.
It is also found that IFRS adoption has different extent of impact on the relationship for each country.