Do IFRS convergence affects firm performance? Picturing Indian-listed manufacturing firms

Abstract

Purpose – The study has endeavored to assay the nexus between the converged version of the International Financial Reporting Standards (IFRS) on the performance of the Indian-listed manufacturing firms. Design/methodology/approach – The study has randomly accessed the data of the Bombay Stock Exchange (BSE) listed Indian manufacturing firms using the Prowess IQ database. It has covered 2014–2016 as pre-IFRS and 2017–2020 as the post-IFRS convergence period. Moreover, the study has followed a longitudinal research design with cross-sectional time-series data and has used the difference-in-difference (DiD) technique to assess the effect of the IFRS convergence on firm performance (FP). Findings – The results have indicated that the adoption of the Indian Accounting Standards (Ind AS) has unlikely reported better FP. It has concurred policy implications as full adoption rather than convergence could reap the benefits of the IFRS. Originality/value – It has contributed to the existing body of knowledge by assaying the effect of the IFRS convergence on FP in developing economies like India using the DiD methodology. The study is an original piece of research and is free from plagiarism.

Keywords

• India
• IFRS convergence
• Firm performance
• Difference-in-difference approach
• Regression analysis