The Impact of the Financial Reporting Environment and Institutional Pressures on Capital Flows and Transfer Pricing Rules: A Cross Country Analysis

Given the ongoing debate on International Financial Reporting Standards, foreign direct investment, stock market and transfer pricing, this thesis, for the first time, through three separate studies, investigates the effect(s) of the financial reporting environment (international standards on auditing and its interaction with international financial reporting standards) on capital flows (i.e. foreign direct investment and market capitalisation) and the institutional factors driving the adoption of transfer pricing rules. Foreign direct investment is important to all types of economies. Emerging and developing economies always develop economic policies (both fiscal and monetary) to attract foreign direct investment. The debate on International Financial Reporting Standards and capital flows is only one aspect of the Financial Reporting Environment. Study 1 of this thesis has informed the body of literature on the crucial role that the financial reporting environment of an economy would play in order to boost its FDI. So far, investors, policy makers, advisors have insights only and only on the microeconomic drivers of FDI. Likewise, as regards to short term capital flows, we have been informed only of the macro-economic environment influencing it and very few accounting performance indicators that influence for example, share prices and market capitalisation. Through study 2 of this thesis, an investigation of the impact of the financial reporting environment on share prices and market capitalisation has been conducted to increase our understanding of the roles of globally accepted reporting standards on the strength of financial information on the stock market. This thesis adds to the ongoing debate by providing insights on the role of International Standards on Auditing and its interaction with International Financial Reporting Standards on both foreign direct investment and market capitalisation. Study 3 as a separate study has examined the transfer pricing and it
Thesis (PhD Doctorate)
Doctor of Philosophy (PhD)
Dept Account,Finance & Econ
Griffith Business School
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