Role of Accounting Standards
Do contrasts in nations' bookkeeping principles influence worldwide venture choices? We investigate this
question by inspecting how bookkeeping separation, the distinction in the bookkeeping models utilized as a part of the
financial specialist's and the investee's nations, influences the advantage portion choices of worldwide shared assets. We find
that financial specialists watch out for underweight investees with more noteworthy bookkeeping separation. Utilizing the
obligatory reception of International Financial Reporting Standards (IFRS) as an occasion that changed the bookkeeping
principles of different nation sets, we inspect how two wellsprings of changes in bookkeeping separation—(1) changes
because of IFRS appropriation of the investee, and (2) changes because of IFRS selection in the speculator's nation—
influence worldwide portfolio distribution choices. We find that the propensity to under put resources into investees with
more prominent bookkeeping separation essentially debilitates when bookkeeping separation is decreased, either from an
investee's IFRS reception or from IFRS selection in the financial specialist's nation. The last discovering holds in spite of the
way that IFRS reception in the speculator's nation had no effect on the bookkeeping gauges under which the investee firms
exhibit their money related data; the main change is in the financial specialist's commonality with these principles. This
proposes contrasts in bookkeeping guidelines influence speculator request by forcing more prominent data preparing costs
on those less acquainted with the revealing gauges.
Keywords - equity home bias, IFRS, information asymmetry, holdings, accounting.