This study analyzes the impact of ownership concentration on the voluntary adoption of International Financial Reporting Standards (IFRS) for European companies. An examination of the legal frameworks concerning the voluntary IFRS adoption in Europe reveals that four countries of the European Economic Area as well as Switzerland allowed the adoption of IFRS instead of local standards for listed firms prior to 2005. An empirical analysis of Austrian, Belgian and German firms indicates that firms voluntarily complying with IFRS are larger, have a more diffuse ownership structure, younger listing age, less leverage and are less capital intense. In addition, ownership concentration is for the first time regarded as an endogenous variable since the possibility of simultaneous causality in the model cannot be excluded. This problem is addressed with the use of an instrumental variables approach, in which product market competition is selected as an instrument for ownership concentration. Altogether, this study complements previous literature and provides highly reliable empirical evidence for the negative correlation of ownership concentration with the voluntary adoption of IFRS in Europe.     «

This study analyzes the impact of ownership concentration on the voluntary adoption of International Financial Reporting Standards (IFRS) for European companies. An examination of the legal frameworks concerning the voluntary IFRS adoption in Europe reveals that four countries of the European Economic Area as well as Switzerland allowed the adoption of IFRS instead of local standards for listed firms prior to 2005. An empirical analysis of Austrian, Belgian and German firms indicates that firms...     »