The impact of mandatory adoption of XBRL on firm’s stock liquidity: a cross-country study

Wafa Sassi, Hakim Ben Othman, Khaled Hussainey

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Abstract

Purpose - The purpose of this paper is to examine the impact of the mandatory adoption of eXtensible Business Reporting Language (XBRL) on firm’s stock liquidity.

Design/methodology/approach – Using a random effects model, this study examines the impact of the mandatory adoption of XBRL on firm’s stock liquidity of 980 companies pertaining to 13 countries for a period from 2000 to 2016.

Findings – We find that the mandatory adoption of XBRL enhances firm’s stock liquidity. In addition, we find that the impact of the mandatory adoption of XBRL on firm’s stock liquidity is more pronounced in civil law countries than in common law countries.

Originality/value – This paper contributes to the literature on the economic consequences of XBRL especially for the civil law countries by examining the impact of the mandatory adoption of XBRL on firm’s stock liquidity.
Original languageEnglish
Number of pages26
JournalJournal of Financial Reporting and Accounting
Early online date22 Jan 2021
DOIs
Publication statusEarly online - 22 Jan 2021

Keywords

  • XBRL
  • cross-country analysis
  • liquidity
  • civil law
  • common law

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