Does IFRS adoption decrease the cost of equity of the global tourism firms?

Zhi Yuan Feng, Ying Chieh Wang, Hua-Wei Huang

Research output: Contribution to journalArticle

Abstract

This article answers the question of whether the adoption of International Financial Reporting Standards (IFRS) reduces the cost of equity capital, with a focus on the tourism industry. We employ a set of global tourism companies and find that mandatory IFRS adoption has a significantly negative relation with the cost of equity capital. However, we find that this relation is varied with different business cultures and geographic areas. Moreover, from interactive analyses of country institutions for the relation between mandatory IFRS adoption and tourism firm’s cost of equity, we show that adopting IFRS complements the deficiencies of various country institutions, such as investor protection, the strength of legal enforcement, and corporate governance.

Original languageEnglish
Pages (from-to)1615-1631
Number of pages17
JournalTourism Economics
Volume23
Issue number8
DOIs
Publication statusPublished - 2017 Dec 1

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equity
tourism
Tourism
firm
costs
cost
corporate governance
investor
Cost of equity
International Financial Reporting Standards
industry
Cost of equity capital

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Tourism, Leisure and Hospitality Management

Cite this

Feng, Zhi Yuan ; Wang, Ying Chieh ; Huang, Hua-Wei. / Does IFRS adoption decrease the cost of equity of the global tourism firms?. In: Tourism Economics. 2017 ; Vol. 23, No. 8. pp. 1615-1631.
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Does IFRS adoption decrease the cost of equity of the global tourism firms? / Feng, Zhi Yuan; Wang, Ying Chieh; Huang, Hua-Wei.

In: Tourism Economics, Vol. 23, No. 8, 01.12.2017, p. 1615-1631.

Research output: Contribution to journalArticle

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