Date of Award
Spring 2019
Degree Name
Bachelor of Science (BS)
Advisor(s)
May Zhang
Abstract
The purpose of this study is to determine if a relation exists between cultural diversity in developing countries and the likelihood that these countries will adopt International Financial Reporting Standards (“IFRS”). I define cultural diversity as the level of ethnic, linguistic, and religious fractionalization in each developing nation as determined by Alesina (2003), with higher scores for each fractionalization measurement symbolizing a higher level of diversity. I hypothesize that IFRS adoption is negatively associated with the level of ethnic, linguistic, and religious fractionalization in developing countries. The study first employs a correlation analysis to determine whether a relation exists between the independent variables, which include ethnic, linguistic, and religious fractionalization scores, and the dependent variable, which describes whether the country has adopted IFRS as of January 1, 2005. Then, binary logistic regression analyses are employed to determine if higher levels of cultural diversity lessen the likelihood of IFRS adoption in these countries. When controlling for GDP, GDP growth rate, FDI inflows, and Rule of Law, a higher level of religious diversity is negatively associated with IFRS adoption in developing countries.
Recommended Citation
Harrell, Erica, "The Effect of Cultural Diversity on IFRS Adoption in Developing Countries" (2019). Gabelli School of Business Honors Thesis Collection. 96.
https://research.library.fordham.edu/gabelli_thesis/96
