scholarly journals Information Asymmetry in the Post-IFRS Adoption Period: Evidence from Developing Countries

2018 ◽  
Vol 3 (4) ◽  
pp. 114-123
Author(s):  
Juniarti Juniarti ◽  
Beatrice Marcellina ◽  
Alvita Angela
Keyword(s):  
Developing Countries ◽  
Information Asymmetry ◽  
Cost Of Capital ◽  
Developed Countries ◽  
The Philippines ◽  
Jel Classification ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Bid Ask Spread ◽  
The Cost

Objective - The adoption of IFRS aims to reduce the level of information asymmetry. Prior studies conducted in developed countries prove that the adoption of IFRS enhances transparency and diminishes information asymmetry. However, in developing countries with a low level of openness, limited regulation, and more centralized ownership, the ability of IFRS to reduce information asymmetry remains unknown. To address this issue, this study aims to investigate whether IFRS adoption will reduce information asymmetry in some developing countries in South East Asia. Methodology/Technique - This research is applied in three developing countries: Indonesia, the Philippines and Thailand. Information asymmetry is proxied by the cost of capital using the Easton model (2004) and a bid-ask spread. Listed firms from the three countries are selected as the research sample resulting in 5.313 firm-years for the period between 2007 and 2016. Findings - This study concludes that the adoption of the IFRS decreases information asymmetry in developing countries. These finding confirm that the benefit of the adoption is the same as in developed countries, despite the level of law enforcement in developing countries being lower. Managers, standard authorities and investors must note that the IFRS conveys benefits to the market, which increases transparency by asking lower returns and valuing company stocks appropriately. Novelty - This study examines the benefits of the adoption of the IFRS in reducing information asymmetry in some emerging countries to enhance the generalization of the results from prior studies that are mostly conducted in developed countries. Type of Paper Empirical Keywords: Bid-ask Spread; Cost of Capital; Information Asymmetry; IFRS Adoption. JEL Classification: M41, M48.

Accounting for Software Development Costs and Information Asymmetry

2005 ◽  
Vol 80 (4) ◽  
pp. 1211-1231 ◽  
Author(s):  
Emad Mohd
Keyword(s):  
Software Development ◽  
Information Asymmetry ◽  
Cost Of Capital ◽  
Software Industry ◽  
High Tech ◽  
Bid Ask Spread ◽  
Development Costs ◽  
Software Firms ◽  
The Cost ◽  
The Impact

I investigate the impact of implementing SFAS No. 86, which provides an exception to the GAAP requirement of the immediate expensing of research and development (R&D), on information asymmetry. Using bid-ask spread and share turnover as proxies for information asymmetry, I find that after the introduction of SFAS No. 86, information asymmetry decreases for software firms relative to that of other high-tech firms. Within the software industry, I find that information asymmetry is significantly lower for firms that capitalize (capitalizers) than for those who expense (expensers) software development costs. Thus, accounting for software development costs per SFAS No. 86 reduces information asymmetry and, consequently, the cost of capital. As well, investors' uncertainty about the future benefits of software development costs is reduced when firms capitalize these costs.

scholarly journals Effect Of The IFRS Adoption On The Cost Of Capital: Evidence From Korea

2018 ◽  
Vol 34 (2) ◽  
pp. 209-216
Author(s):  
Leem Wook-Bin ◽  
Jee Hoon Yuk
Keyword(s):  
Cost Of Capital ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Generalization Problem ◽  
The Cost ◽  
Positive Effect

This study investigates whether the cost of capital of Korean listed firms was substantially reduced after the IFRS adoption in long-term aspect and which firms listed in KOSPI or KOSDAQ market had been more enjoyed the benefit. Prior studies related to this subject don’t provided consistent results and have limitations of insufficiency of research periods and generalization problem. Therefore, this study analyzes the positive effect of the IFRS adoption in Korea using long-term based approach and differential measurements (CAPM and WACC) to facilitate generalization. Results of the study found that the cost of capital of Korean listed firms had been significantly reduced during 5 years after the IFRS adoption. In addition, the cost of capital of KOSPI listed firms was reduced more than KOSDAQ listed firms. The results provide meaningful implications to evaluate the effects of IFRS adoption on the cost of capital and to assess accomplishment of fundamental purpose of the IFRS adoption in Korea.

The cost implication of primary prevention in the HOPE 3 trial

2019 ◽  
Vol 5 (3) ◽  
pp. 266-271
Author(s):  
Andre Lamy ◽  
Eva Lonn ◽  
Wesley Tong ◽  
Balakumar Swaminathan ◽  
Hyejung Jung ◽  
...  
Keyword(s):  
Developing Countries ◽  
Primary Prevention ◽  
Cost Saving ◽  
Developed Countries ◽  
Sensitivity Analyses ◽  
Clinical Trial Registration ◽  
Pressure Lowering ◽  
The Cost ◽  
Care Costs ◽  
Country Specific

Abstract Aims The Heart Outcomes Prevention Evaluation-3 (HOPE-3) found that rosuvastatin alone or with candesartan and hydrochlorothiazide (HCT) (in a subgroup with hypertension) significantly lowered cardiovascular events compared with placebo in 12 705 individuals from 21 countries at intermediate risk and without cardiovascular disease. We assessed the costs implications of implementation in primary prevention in countries at different economic levels. Methods and results Hospitalizations, procedures, study and non-study medications were documented. We applied country-specific costs to the healthcare resources consumed for each patient. We calculated the average cost per patient in US dollars for the duration of the study (5.6 years). Sensitivity analyses were also performed with cheapest equivalent substitutes. The combination of rosuvastatin with candesartan/HCT reduced total costs and was a cost-saving strategy in United States, Canada, Europe, and Australia. In contrast, the treatments were more expensive in developing countries even when cheapest equivalent substitutes were used. After adjustment for gross domestic product (GDP), the costs of cheapest equivalent substitutes in proportion to the health care costs were higher in developing countries in comparison to developed countries. Conclusion Rosuvastatin and candesartan/HCT in primary prevention is a cost-saving approach in developed countries, but not in developing countries as both drugs and their cheapest equivalent substitutes are relatively more expensive despite adjustment by GDP. Reductions in costs of these drugs in developing countries are essential to make statins and blood pressure lowering drugs affordable and ensure their use. Clinical trial registration HOPE-3 ClinicalTrials.gov number, NCT00468923.

scholarly journals Sustainable Development, Education for Sustainable Development and Philippine Community

2016 ◽  
Vol 8 (2) ◽  
pp. 29-34 ◽  
Author(s):  
Kim Jim F. Raborar
Keyword(s):  
Sustainable Development ◽  
Developing Countries ◽  
Natural Resources ◽  
Abiotic Factors ◽  
Developed Countries ◽  
The Philippines ◽  
Next Generation ◽  
Natural Processes ◽  
The Earth ◽  
The World

Abstract Development is an innate manifestation on earth. It is not even surprising that the world has developed tremendously over the past decade considering the development in the previous decades. That is, development precipitates development. Therefore, even though everybody can see what risks it brings to the earth, we cannot simply restrain it. Of course, we cannot restrain it. The bottomline is that we have no choice but to be part of the development and be one of those who assist in the ever spontaneous development by trying to minimize its unwanted effects to the planet and its inhabitantants, the humans. Even looking at the ‘development’ from one’s own microcosm, we can perceive that as we go through life and gain some of what this world can offer, we produce tons and tons of wastes. These wastes, which are naturally not part of the earth, pollute and disrupt the natural processes of the planet. It is also simple to notice that the fundamental cause of the depletion of the earth’s natural resources was definitely proportional to the increase in population and to the development itself. Here lies one of the underlying global problems at hand aside from poverty, hunger, low access to education, and other socio-anthropological issues we have, this is the issue on natural resources depletion. Even to worldleaders from well-developed countries can recognize that they will also be the ones at the receiving end of this problem. It is basic that living organisms rely on their environment or the abiotic factors, to live sustainably. Considering these problems, the United Nations, with the worldleaders as its composition, has come up with strategies that advocate development while keeping the earth’s natural resources from depletion or the earth’s natural processes from disruption. This advocacy is called Sustainable Development. Sustainable Development is the development that meets the need of the present generation without compromising the ability of the next generation to meet their own needs. It is, at its core, an advocacy for futurism and the next generation. Sustainable Development is primarily anchored with the case of the “carrying capacity” of the planet Earth. It was already implied by several natural scientists as well as social scientists that indeed the Planet Earth increasingly finds it hard to sustain the needs of the human races because of overpopulation. These things result to poverty and hunger around the world. On the otherhand, it is increasing implied that most of the Natural Resources of the planet goes to the well-developed countries, leaving the developing and underdeveloped countries with meager resources. This further increases cases of hunger and poverty. Although it is deceptive that the call for a sustainable development should take its toll on the countries with bigger economy since they consume the most and pollute the most, it is very definite that there should be a much more intensive application in developing countries since we are just about to experience what the rest of the developed countries have already experienced. More importantly, developing countries should advocate Sustainable Development since it is a common knowledge that even if they contribute least to the causes of natural resource depletion and disruption of natural processes, they are the ones who suffer most from the devastating effects of unsustainable development. As citizens of the Republic of the Philippines, we are one of those who suffer most.

scholarly journals Assessing the Potential Deployment of Biosensors for Point-of-Care Diagnostics in Developing Countries: Technological, Economic and Regulatory Aspects

Biosensors ◽  
2018 ◽  
Vol 8 (4) ◽  
pp. 119 ◽  
Author(s):  
Daniel Migliozzi ◽  
Thomas Guibentif
Keyword(s):  
Developing Countries ◽  
Technological Development ◽  
Point Of Care ◽  
Medical Personnel ◽  
Developed Countries ◽  
Key Factors ◽  
Resource Limited ◽  
Point Of Care Diagnostics ◽  
Successful Case ◽  
The Cost

Infectious diseases and antimicrobial resistance are major burdens in developing countries, where very specific conditions impede the deployment of established medical infrastructures. Since biosensing devices are nowadays very common in developed countries, particularly in the field of diagnostics, they are at a stage of maturity at which other potential outcomes can be explored, especially on their possibilities for multiplexing and automation to reduce the time-to-results. However, the translation is far from being trivial. In order to understand the factors and barriers that can facilitate or hinder the application of biosensors in resource-limited settings, we analyze the context from several angles. First, the technology of the devices themselves has to be rethought to take into account the specific needs and the available means of these countries. For this, we describe the partition of a biosensor into its functional shells, which define the information flow from the analyte to the end-user, and by following this partition we assess the strengths and weaknesses of biosensing devices in view of their specific technological development and challenging deployment in low-resource environments. Then, we discuss the problem of cost reduction by pointing out transversal factors, such as throughput and cost of mistreatment, that need to be re-considered when analyzing the cost-effectiveness of biosensing devices. Beyond the technical landscape, the compliance with regulations is also a major aspect that is described with its link to the validation of the devices and to the acceptance from the local medical personnel. Finally, to learn from a successful case, we analyze a breakthrough inexpensive biosensor that is showing high potential with respect to many of the described aspects. We conclude by mentioning both some transversal benefits of deploying biosensors in developing countries, and the key factors that can drive such applications.

The effects of IFRS adoption and firm size on audit fees in financial institutions in Ghana

2019 ◽  
Vol 32 (3) ◽  
pp. 436-453
Author(s):  
William Coffie ◽  
Ibrahim Bedi
Keyword(s):  
Financial Institutions ◽  
Firm Size ◽  
Financial Services ◽  
Audit Fees ◽  
Financial Services Industry ◽  
Content Type ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Services Industry ◽  
The Cost

Purpose This study aims to investigate the effects of international financial reporting standards (IFRS) adoption and firm size on auditors’ fees determination in the Ghanaian financial industry. Design/methodology/approach The authors use the annual report of 52 listed and non-listed firms spanning from 2003 to 2014. Guided by the hypotheses, the authors conditioned audit fees on IFRS adoption and firm size and execute robust fixed effects panel regression. Findings The results show that IFRS adoption has a positive coefficient with audit fees suggesting that the adoption of IFRS, indeed, increases the audit fees paid by banks and insurance firms, as well as the industry as a whole. The results are consistent with the idea that IFRS adoption increases auditor efforts with respect to time and complex nature of some aspect of the standards. Again, as expected, the coefficient of size is positively and significantly related to audit fees. This indicates that the size of the auditee plays a vital role in determining audit fees. Research limitations/implications The study is limited by industry (i.e. the financial services industry) and geography (i.e. Ghana). The authors propose further research that will widely consider other sectors and countries to improve the current scanty literature in this area. Besides, theoretically, the study is limited to the lending credibility theory and feels compelled to reiterate the importance of considering alternative theoretical perspective(s) in future research. Practical implications This study is significant to practitioners as it demonstrates the importance of the determinants of the auditors’ fees. It helps auditors to apply the relevant charging formula when determining audit fees, while it helps managers to improve upon the quality of reporting to control audit bill and forecasting their audit expenditure. Originality/value The results of the study extend the literature on the cost side of IFRS adoption by investigating the financial services industry and non-listed firms in a new context, i.e. a developing country where this research is uncharted. The existing studies based their analysis on either cross-section or pooled analysis and shorter post-adoption period (Cameran and Perotti, 2014). However, using an extended post-adoption period data, the authors base the study on analytical panel model, which directly examine the cost side of IFRS adoption with size as joint key explanatory variables with emphasis on financial institutions and external auditors.

scholarly journals The Cost of Capital of Cross-listed Firms

2004 ◽  
Vol 10 (3) ◽  
pp. 465-486 ◽  
Author(s):  
Kees G. Koedijk ◽  
Mathijs A. van Dijk
Keyword(s):  
Cost Of Capital ◽  
Listed Firms ◽  
The Cost

Corporate governance and cost of equity: empirical evidence from Latin American companies

2016 ◽  
Vol 16 (5) ◽  
pp. 831-848 ◽  
Author(s):  
Emanuele Teti ◽  
Alberto Dell’Acqua ◽  
Leonardo Etro ◽  
Francesca Resmini
Keyword(s):  
Corporate Governance ◽  
Latin American ◽  
Cost Of Capital ◽  
Negative Relationship ◽  
Developed Countries ◽  
Equity Capital ◽  
Cost Of Equity ◽  
Content Type ◽  
The Cost ◽  
The Relationship

Purpose This paper aims to investigate the extent to which corporate governance (CG) systems adopted by Latin American listed firms affect their cost of equity capital. Several studies on the link between the two aforementioned dimensions have been carried out, but none in the context of Latin American firms. Design/methodology/approach A CG index is created by taking into account the peculiarities of each country and the recommendations given by the corresponding CG institutes. In particular, to assess the level of CG quality, three sub-indexes have been identified: “Disclosure”, “Board of Directors” and “Shareholder Rights, Ownership and Control Structure”. Findings The results indicate a negative relationship between CG quality and the cost of equity. In particular, the “Disclosure” component is the one mostly affecting the cost of equity. Research limitations/implications This study contributes to the literature by adding knowledge on the relationship between CG and cost of capital considering, for the first time, the overall Latin American market. Practical implications The paper proves that institutional investors all over the world are disposed to pay a premium to invest in firms with effective CG standards; moreover, this premium is higher in emerging countries such as those analyzed in this paper, rather than in developed countries. Originality/value To the authors' knowledge, this is the first paper empirically investigating the relationship between CG and cost of capital in Latin America.

Health effects of pesticides on agricultural farmers in the developing countries of Fiji, Ecuador, the Philippines, and Costa Rica versus the United States

2018 ◽  
Vol 2 (02) ◽  
Author(s):  
Imani Love ◽  
Chistina Pollanis
Keyword(s):  
United States ◽  
Developing Countries ◽  
Costa Rica ◽  
Economic Value ◽  
Developed Countries ◽  
The United States ◽  
The Philippines ◽  
Farm Workers ◽  
High Concentration ◽  
Global Issues

This paper will compare and contrast the reasons and statistics of development of negative health affects experienced by farmers and farm workers exposed to pesticides in both developed and developing countries. Several studies have suggested that a constant and close exposure of pesticides have negative affect on those who work closely with them. In developed countries farmers and farm workers have a lower risk of being affect by pesticides, whereas, in developing countries many workers face several disadvantages that affect the opportunities that they may be afforded. Countries in which one can clearly examine these specific global issues include developing countries such as: Ecuador, Fiji, Philippines and Costa Rica. These countries have the lack of knowledge surrounding pesticides, outdated technology, and the economic value of crops outweighing the value of human health. Whereas, within developed countries, such as the United States that are afforded more technology and that are scientifically aware and knowledgeable about pesticides, farmers and farm laborers experience improved circumstances and statistics that surround the use of pesticides amongst agricultural workers and farmers. Being that farmers and farm workers from both developed and developing countries are individuals who treat and nurture agricultural lands closely, including the application of pesticides; they inhale a high concentration of the chemicals. Another contributing factor to the inhaling of high concentration is the amount of time each worker spends concocting the mixture of insecticides, fungicides, herbicides, nematocides (used to kill nematodes, elongated cylindrical worms), and rodenticides and applying the mixture to the crops. Creation of the mixture, application of pesticides, and disposable of pesticide containers contribute in making the farmers and farm workers high at risk for developing pesticide related illnesses. By researching and further examining the various circumstances that surround the production and application of pesticides, what will be determined are what types of acute or chronic illnesses emerge and why are they more prevalent in developing countries rather than developed countries.

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