e-journal

Globalization, US foreign investments and accounting standards

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Purpose – This paper aims to examine the relation between the proportion of direct investment to
US total – direct and portfolio – investment abroad and their country-specific determinants in
developed and developing countries between 1997 and 2005, emphasizing the role of high-quality
accounting standards and corporate governance.
Design/methodology/approach – The study covers 46 developed and emerging market countries
that are classified into four groups: Advanced, Asian, Central and Eastern European and Latin
American. In order to eliminate the adverse effects of possible outliers in some observations on
regression results, fixed effect robust regression (RR) techniques were conducted, in addition to fixed
effect ordinary least squares (OLS) estimation using panel data.
Findings – It was found that the proportion of direct investment to US total investment abroad is
strongly and negatively related to both high-quality accounting standards and effective corporate
governance, even after controlling for a number of variables found in previous research to be
important: inflation, stock market capitalization, per capita gross domestic product, openness of
destination countries’ economies and tax rates.
Research limitations/implications – One major problem in international accounting research is
the difficulty in obtaining of data. This problem was encountered in this study, too. Therefore, some
emerging market countries are necessarily excluded from the sample.
Originality/value – The main focus is the contributions of accounting standards and corporate
governance to explaining tradeoffs between US direct and portfolio investment in developed and
developing countries. In this sense, this is – to the authors’ knowledge – the first study in this area.

Keywords Accounting standards, Corporate governance, Portfolio investment, Stock markets

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Informasi Detail

Judul Seri

Review of Accounting and Finance

No. Panggil

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Penerbit

: Emerald Group., 2009

Deskripsi Fisik

Review of Accounting and Finance Vol. 8 No. 1, 2009 pp. 5-37

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

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