IFRS Adoption and Foreign Investment in Africa: Institutions Also Matter

23 Pages Posted: 7 Sep 2014

See all articles by Uchenna Efobi

Uchenna Efobi

Covenant University

Francis Odianonsen Iyoha

Covenant University

Dick Mukoro

Covenant University

Date Written: September 5, 2014

Abstract

The main argument of this study is that the rising global agitation for developing countries, including those in Africa, to adopt IFRS for foreign investment attractiveness is confronted by institutional framework of these countries. In essence, we ask an important question, what effect does IFRS adoption have on FDI when considering the institutional ‘plague’ – corruption – in African countries? 42 African countries were used as sample for the period 2001-2012. Two estimation approach were applied – the feasible generalised least square technique and the system GMM. The result reveals that African countries will benefit more from IFRS by improving their institutional framework, than having a static institutional framework and then adopting IFRS. This result is robust in diverse respect.

Suggested Citation

Efobi, Uchenna and Iyoha, Francis Odianonsen and Mukoro, Dick, IFRS Adoption and Foreign Investment in Africa: Institutions Also Matter (September 5, 2014). Available at SSRN: https://ssrn.com/abstract=2492235 or http://dx.doi.org/10.2139/ssrn.2492235

Uchenna Efobi (Contact Author)

Covenant University ( email )

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria

Francis Odianonsen Iyoha

Covenant University ( email )

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria

Dick Mukoro

Covenant University ( email )

Canaanland
Km 10 Idiroko road
Ota, 24001
Nigeria

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