An Empirical Study on the Impact of IFRS Adoption on Attracting Foreign Direct Investment in Nigeria
Keywords:
IFRS adoption; Foreign direct investment; Economic growth; Financial statement.Abstract
The adoption of IFRS in Nigeria’s accounting system is not consistent with the signalling theory that is expected to promote FDI inflows. The government is not strong enough to encourage foreign investment in Nigeria. This study examines the impact of the adoption of IFRS on FDI over a 12-year sample. The results show that FDI generally continues to grow in the pre-adoption stage, while there are many inconsistent rises and declines in the post-adoption stage. We used two sample Ttests to test whether there was significant difference in FDI since the adoption of FDI. There was no significant difference. This contradicts the signalling effect of IFRS adoption on investors. We recommend that the Government stabilize the economy so that certain economic theories and expectations can be applied to Nigeria.
