| The convergence of accounting standards around the world has been widely recognized and supported by countries all over the world.In particular,the international accounting standards board(IASB),reorganized from the international accounting standards board(IASC)in 2001,has intensified its negotiations with national or regional accounting standards bodies and promoted its international financial reporting standards(IFRS).From the history of the change of China’s Accounting Standards,China’s Accounting Standards have gradually strengthened their integration with the International Accounting Standards since Reform and Open up,and absorbed the content of international accounting standards,leading to several major changes in accounting standards and accounting systems.Different from the previous three voluntary changes,China’s Accounting Standards change in 2007 is mandatory in order to fulfill the conditions of WTO.As a condition to join the WTO,China also began to implement the"Accounting Standards for Enterprises" adopting to IFRS on January 1,2007.The main purpose of China’s mandatory adoption of IFRS is to minimize the institutional gap with other countries so as to facilitate the economic exchanges between China and other countries.Whether this purpose has been achieved?Whether the economic consequences of the reform have promoted the economic exchanges between China and other countries is the main content of this paper to investigate the economic consequences of the mandatory reform of accounting standards in 2007.China’s economic exchanges with other countries include not only products and services,but also capital flow.The former is reflected in trade of goods and services,while the latter is transnational investment.Comparing with transnational trade,transnational investment relies more on accounting standards and accounting information,therefore the impact of the mandatory changes of China’s accounting standards in 2007 regarding transnational investment deserve further research.China has achieved fruitful research results in the field of accounting information quality and investment behavior of different investment subjects in the change of accounting standards.but there are few researches in the macro field.However,it has been ten years since China adopted international convergent accounting standards in 2007,which provides a treasurable opportunity for us to evaluate the impact of accounting standards reform on transnational investment.The second chapter of this paper reviews the domestic and foreign literatures,including the literatures on the factors affecting transnational investment,on the economic consequences of accounting standards,and on the impact of the change of accounting standards on transnational investment most relevant to the topic selected in this paper.After researchingall the literatures,we found that there area few literaturesabout economic impacts on the transnational investment due to change of accounting standards.Moreover,all these conclusions are foreign literatures surrounding developed countries’ environment.There are biginstitutional differenceswithin different countries.Whereas China is a big developing country,institutional differences between China and the western developed countries would definitelyinfluence the economic consequences impacted by accounting standards change.Therefore,it is necessary to understand the current status of Chinese transnational investment through the third chapter,including direct transnational investment and indirect transnational investment.Moreover,it analyzes,from the institutional perspective,the possible impacts of other regulations on transnational direct investment.At last,through empirical researchin three consecutive chapters,we examine the impact of China’s accounting standards change on transnational direct investment and indirect investment respectively in terms of two ways:institutional distance and institutional quality.From the research of above chapters,this paper draws following conclusions:Firstly:Change of accounting standards has impact on macro transnational direct investment.The fifth part of the paper quotesthe sum of China’s OFDI and FDI from 2004 to 2010 as the figure of transnational direct investment.According to the path of institutional distance,the paper analyzes and tests the impact of accounting standards change on transnational direct investment and its mechanism using theoretical and empirical approaches.The study finds that the accounting standards change improves the comparability of accounting standards between countries,and the comparability of accounting standards leads to the increase of transnational direct investment between China and other countries,or in other word,the accounting standards change accelerates the flow of transnational direct investment through themediating effect contributed by better comparability.Second,the change of accounting standards also has an impact on micro-transnational direct investment.In the third part,this paper manually sorts the trading data of cross-border M&A(Merges and Acquisitions)from Wind database,and makes statistician analysisfrom 2004 to 2010.By deducting the domestic finishedM&A,ongoing M&A,M&A losing data about acquirer’s country or target’s country,M&A from related parties from all M&A cases,also rejecting those M&A cases such as overseas listing in special areas due to institutional reasons(e.g.,Hong Kong,Cayman,Bermuda,and the British Virgin Islands),we find that the number of cross-border M&A,either foreign M&A or overseas M&A,peaked in 2007-2008.Though transnational direct investment includes greenfield investment and transnational M&A,transnational M&A gradually become the mainstreaming way.Therefore,the conclusion provides supporting evidence at the micro level for the above conclusion on the impact of the change of accounting standards on macro transnational direct investment.Third,the change of accounting standards has an impact on micro-transnational indirect investment.The sixth part of the paper firstly utilizesthe data from listed companies with QFⅡ investment in China’s A-share capital market as samples,for 11 consecutive years ranging from 2003 to 2013(1935 sub-samples),and draws a conclusion after empirical test:QFⅡ investment increased significantly after the change of accounting standards.Secondly,on the intermediary effect test,the reform of accounting standards is to promote the increase of QFⅡ investment though the improvement of the comparability of accounting standards.However,this intermediary effect only plays a role in the period from 2004 to 2010.If the period is too short,the comparative intermediary effect is not obvious,and if the period is too long,the influence of accounting standards comparability on QFⅡ investment will be weakened with the passing of time.The mechanism is mainly that the improvement of comparability of the new accounting standards reduces the information processing cost to foreign investors thus promoted QFⅡ investment.By using listed companies with QFⅡ investment from 2007 to 2013 as samples(1301 sub-samples),the hypothesis that the improvement of comparability of new accounting standards can reduce the "familiarity bias" of foreign investors’ transnational investment thus promote QFII investment has not been testified.The conclusion proves that the "transaction cost theory" can effectively explain the mechanism of the impact of the change of accounting standards on transnational indirect investment under the institutional pathFourth,the change of accounting standards influences transnational investment mainly through institutional distance path.Whether in macro transnational investment or micro transnational investment,change of accounting standards will promote transnational investment through the improvement of the comparability,indicating the rightness of institutional distance path.As the quality of accounting standards at the macro level cannot be precisely measured after the change of accounting standards,this paper does not analyze the impact of system quality on macro transnational investment.However,in the seventh part of the paper,the quality of accounting information is chosen as the measuring index of the system quality at the micro level,and it is analyzed and tested,through both theoretical and empirical aspects,whether the change of accounting standards promote micro transnational investment via better quality of aceounting data.The conclusion is that the change of accounting standards has not attracted more QFⅡ investment by improving the quality of accounting information.Therefore,the path of system quality at the micro level cannot be proven.Of course,the main reason is that other supporting systems to implement accounting standards in China are not yet perfect,which affects the positive role that the change of accounting standards should play,reflecting the economic impact of institutional factors on the change of accounting standards,Utilizing institutional factors,this paper analyses and tests the influence and mechanism of the change of accounting standards intransnational investments through institutional distance and institutional quality.Specifically,the innovation and contribution of this paper are mainly embodied in the following aspects:1.This paper,for the first time,investigates the impact of accounting standards change on FDI and OFDI in volume of macro transnational direct investment.Although there are many Chinese literatures studying the economic consequences of accounting standards change,they maiuly focus on the micro field and analyze the impacts on micro enterprises from the perspectives of accounting information quality,corporate investment and financing,executive compensation,etc.There are also literatures that extend the influence to the capital market and analyze the impact of the change of accounting standards on the efficiency of the capital market.However,the reform of accounting standards will not only have expected and unexpected effects on the micro domain,but also,as a macro system reform,have similar impacts to the international ones,because it reduces the institutional distance between China and other countries in transnational investment.And it will positively promote the flow of FDI and OFDI between China and other countries.This paper analyses and tests the impact of the change of China,s accounting standards on macro-transnational direct investment and therefore extends the economic consequences of the change of China’s accounting standards to the macro-domain.2.Different from previous studies,this paper takes the change of accounting standards as a macro institutional reform,and analyzes its impact on transnational investment from a relatively new perspective-institutional distance and institutional quality,which provides favorable evidence for the institutional theory of transnational investment.It is found that the change of accounting standards affects transnational investment through institutional distance rather than institutional quality.This paper uses innovatively the indicator of accounting standards comparability to measure the institutional distance,and verifies that the change of accounting standards has a significant impact on transnational investment through the intermediary effect test of the accounting standards comparability.The influential mechanism of institutional distance(accounting standards comparability)is that the improvement of accounting standards comparability reduces transaction costs or unfamiliarity between different countries and shortens institutional distance,then promotes transnational direct investment.Compared with the institutional distance,institutional quality is not only complicated and difficult to measure accurately,but also affected by other factors.Therefore,the impact of the change of accounting standards on transnational investment is difficult to be realized through institutional quality path in the short term.3.This paper investigates the impact of accounting standards change on Chinese transnational investment.The scope of transnational investment is very broad.There are both direct investment and indirect investment,inflow and outflow of transnational capital,micro investment and macro investment.The previous studies only study the impact of accounting standards change on transnational investment from one aspect,which may lead to a one-sided understanding and conclusion.By analyzing and testing the impact of accounting standards reform on FDI and OFDI,QFII and cross-border mergers and acquisitions,the paper comprehensively studies impact of Chinese change of accounting standards on different cross-border investment,as well as the path and mechanism.In practice it provides useful reference for the department of formulating accounting standards to comprehensively measure the economic consequences of accounting standards.This paper comprehensively investigates the impact of the accounting standards change on Chinese transnational investment.Previous studies merely researched the impact of accounting standards change on transnational investment from one certain aspect,however this paper research the impacts from multi-aspects,which are transnational direct investment and indirect investment,macro and micro approaches,and transnational investment inflow and outflow,in order to examine the total impact of the accounting standards reform on transnational investment.In short,the reform of accounting standards in China not only has an impact on the micro level such as transnational investment decision-making,but also on the macro transnational investment.Trying to understand accounting standards as a national macro policy,this paper further proves that importance of institutional factors on transnational investment. |
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