Firm’s Value: International Financial Reporting Standard Adoption, Concentrated Ownership and Investor Protection Issue: Data Asia

Abstract

A study of the relationship between ownership structure and firm’s value talks about the International Financial Reporting Standard (IFRS) adoption and Investor Protection. Some previous findings still had contradictory conclusion and mixed result. It indicates an opened question that need an empirical evidence. The objectives of this research were to examine the effect of concentrated ownership on International Financial Reporting Standard adoption and t the effect of concentrated ownership and investor protection on firm’s value in five Asian companies. The samples were taken from five Asian Countries: China, South Korea, Malaysia, Taiwan dan Thailand. The sample which is used in this research is consisting of 7.100 firm year observations. Asian countries were chosen because they have unique characteristics, such as emerging market, its ownership structure is more concentrated on family, and its board of governance is weak (Choi, 2003). Multiple Regression analysis was used for hypothesis testing. The results showed that concentrated ownership had a positive effect on the firm’s value. While concentrated ownership and International Financial Reporting Standard adoption had a positive effect on the firm’s value. On the other hand, investor protection had a negative effect on the firm’s value in a country with low iinvestor protection.