The Impact of IFRS Adoption on Capital Structure: - Pre - Post Analysis of listed Banks in Ethiopia.

Abstract

This paper explores The Impact of IFRS Adoption on Capital Structure: - Pre - Post Analysis of listed Banks in Ethiopia. This study uses different econometric methods in estimating regression models to broaden our understanding of IFRS adoption on Capital Structure. The researcher provide evidence on the interactions of analyst following, managerial opportunism and information asymmetry besides macroeconomic factors on Capital Structure information. The study leverages a fixed effects panel data set of Five Selected Banks in Ethiopia from the total population of 20 Listed Banks in Ethiopia’s. The Researcher show that Breusch, Lagrange Multiplier tests and the test of over-identifying restrictions were used. The researcher employed Secondary data were collected from the annual reports of Financial Statement. The researcher used a hand-collected dataset between 2013 and 2021. The regression analysis results from the findings, it concludes that, from 2013-2021 excluding 2005, while IFRS did not have any statistically significant impact on the cost of equity capital and cost of debt capital, it did have a statistically significant impact on the market price per share and equity returns. Also, even though IFRS did not have any statistically significant impact on the exchange rate and profitability, it had a statistically significant impact on earnings per share, operations margin, GDP growth, interest rate and , return on investment capital