| Nearly 130 nations around the world require or permit the use of International Financial Reporting Standards (IFRS). The widespread acceptance of IFRS has coincided with economic globalization and increased foreign direct investment (FDI). FDI inflows are an important measure of global economic activity. Further, FDI inflows are considered a critical component of economic growth, especially for developing countries. To date, only a limited number of research studies have investigated IFRS adoption as a determinant of FDI inflows. The objective of this study is to assess the association between IFRS adoption and FDI inflows by replicating and extending an existing study. This study also examines differences in FDI inflows between developed and less developed countries that have adopted IFRS. The results from performing ordinary least squares (OLS) analysis suggest that IFRS adoption is positively associated with FDI inflows for the entire sample of countries and the subsample of developing countries. However, the OLS results did not produce evidence that IFRS adoption is positively associated with FDI inflows for the subsample of developed countries. |
