Voluntary Adoption of the IFRS and Industry-Level Comparability: Evidence from Korean Unlisted Firms

ABSTRACT

This study examines the role of industry-level comparability with regard to voluntary adoption of the international financial reporting standards (IFRS) by unlisted firms in Korea. Mandatory adoption of the IFRS for listed firms in 2011 inhibits financial statement comparability between listed and unlisted firms. Our empirical findings reveal that unlisted firms in industries with higher ratios of listed firms tend to adopt the IFRS voluntarily. After this adoption, such unlisted firms seem to attract greater investment in the public debt market.

KEY WORDS:

• IFRS
• industry-level comparability
• public debt
• unlisted firms

Acknowledgments

The authors are grateful to the editor Ali M. Kutan and two anonymous referees for their helpful comments and insight. Any remaining errors, if any, are those of the authors.

Funding

This work was supported by a grant from Kyung Hee University in 2015 (KHU-20151265).

Additional information

Funding

This work was supported by a grant from Kyung Hee University in 2015 (KHU-20151265).