Does IFRS Adoption Effect on the Cost of Capital Differ Among Firms

Abstract— The purpose of this paper is to examine at the first time the relationship between the IFRS mandatory adoption and the
company’s capital cost. At the second time, it aims to verify the moderating role of the informational environment and opportunities growth on this relationship. This study focuses in the French context by using, as a statistic method, the panel data. His sample encompasses all the companies that belong to the CAC All Tradable index from 2002 to 2012. The IFRS mandatory adoption reduces significantly the company’s capital cost. This impact of international standards is moderated by the company’s growth opportunities. However, it is not moderated by the company’s informational environment. The results of this study help to understand the consequences of the imposition of international standards. They encourage the companies that are not obliged to adopt the IFRS, to apply them voluntarily in order to reduce the cost of capital.