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Home and foreign host country IFRS adoption and cross-delisting

Author

Listed:
  • Kiridaran Kanagaretnam

    (York University)

  • Xiangting Kong

    (Sun Yat-Sen University)

  • Albert Tsang

    (The Hong Kong Polytechnic University)

Abstract

This study examines whether and how the mandatory adoption of international financial reporting standards (IFRS) affects a firm’s cross-delisting decision. Using a comprehensive sample of international cross-delistings, we show that mandatory IFRS adoption in the cross-listing host countries of multinational enterprises (MNEs) increases the delisting propensity of non-IFRS-reporting firms. In contrast, mandatory IFRS adoption in both home and host countries of cross-listing firms decreases the delisting propensity of MNEs in the post-IFRS period. The results of cross-sectional tests further suggest that the increased cross-delisting propensity for domestic GAAP-reporting firms post-IFRS adoption in foreign host countries is more pronounced for firms with a greater difference between domestic GAAP and IFRS. Overall, our results show the differential effects of IFRS adoption in home/host countries of MNEs on their cross-delisting decisions.

Suggested Citation

  • Kiridaran Kanagaretnam & Xiangting Kong & Albert Tsang, 2020. "Home and foreign host country IFRS adoption and cross-delisting," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 1008-1033, August.
    • Handle: RePEc:pal:jintbs:v:51:y:2020:i:6:d:10.1057_s41267-019-00300-1
    DOI: 10.1057/s41267-019-00300-1
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