Donor aid allocation and accounting standards of recipients

Akira Nagae*, Hajime Katayama, Koichi Takase

*この研究の対応する著者

研究成果査読

抄録

How do donor countries determine foreign aid allocation? The literature seems to agree that institutional quality could be a possible determinant. However, no study has found any decisive variable to represent this factor. Recently, an increasing number of countries, developed as well as developing, have been adopting International Financial Reporting Standards (IFRS) as a single set of high-quality global accounting standards. IFRS aims to generate accurate financial information and to remove information asymmetry, thereby potentially improving corporate governance and performance in firms. We hypothesize that donors allocate more aid to mandatory IFRS-adopting recipients than nonadopting ones, expecting higher aid effectiveness in the recipients. Our bilateral panel data analysis on commitment flows between 28 Development Assistance Committee (DAC) donors and more than 90 recipients shows that, upon mandatory IFRS adoption by a recipient, donors increase the amount of aid by approximately 20%.

本文言語English
論文番号105702
ジャーナルEconomic Modelling
106
DOI
出版ステータスPublished - 2022 1

ASJC Scopus subject areas

  • 経済学、計量経済学

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