TY - JOUR

T1 - The impact of financial instruments disclosures on the cost of equity capital

AU - Yamani, Amal

AU - Hussainey, Khaled

AU - Albitar, Khaldoon

PY - 2021/10/18

Y1 - 2021/10/18

N2 - PurposeThis study aims to investigate the impact of financial instrument disclosures under the International Financial Reporting Standard (IFRS) 7 on the cost of equity capital (COEC).Design/methodology/approachThe sample consists of 56 banks listed in the Gulf cooperation council (GCC) stock markets over 7 years from 2011 to 2017. A self-constructed index is used to measure the compliance level in addition to quantitative methods and panel data regression adopted to test the research hypotheses.FindingsThe authors find that the compliance level with IFRS 7 does not improve from 2011 until 2017 in the GCC banks. The authors also find that compliance with IFRS 7 disclosures reduces the COEC.Originality/valueThe authors also provide new empirical evidence that the level of mandatory financial instruments disclosures under IFRS 7 reduces the COEC. The findings offer policy implications. It shows that compliance with IFRS 7 disclosure requirements leads to desirable economic consequences.

AB - PurposeThis study aims to investigate the impact of financial instrument disclosures under the International Financial Reporting Standard (IFRS) 7 on the cost of equity capital (COEC).Design/methodology/approachThe sample consists of 56 banks listed in the Gulf cooperation council (GCC) stock markets over 7 years from 2011 to 2017. A self-constructed index is used to measure the compliance level in addition to quantitative methods and panel data regression adopted to test the research hypotheses.FindingsThe authors find that the compliance level with IFRS 7 does not improve from 2011 until 2017 in the GCC banks. The authors also find that compliance with IFRS 7 disclosures reduces the COEC.Originality/valueThe authors also provide new empirical evidence that the level of mandatory financial instruments disclosures under IFRS 7 reduces the COEC. The findings offer policy implications. It shows that compliance with IFRS 7 disclosure requirements leads to desirable economic consequences.

U2 - 10.1108/IJAIM-02-2021-0052

DO - 10.1108/IJAIM-02-2021-0052

M3 - Article

VL - 29

SP - 528

EP - 551

JO - International Journal of Accounting and Information Management

JF - International Journal of Accounting and Information Management

SN - 1834-7649

IS - 4

ER -