This article examines the financing behavior of German firms in the period 2000–2006. The analyses show that the investment volumes of non-listed small and medium-sized firms, which – insofar as external sources of finance are concerned – depend on bank lendings to an especially large...

This paper critically examines the impact of voluntary adoption of Internationally Accepted Accounting Principles (IAAP, i.e., IAS/IFRS and U.S. GAAP) on the cost of equity capital in Germany. We find that (1) overall cost of equity-capital estimates in the Capital Asset Pricing Model (CAPM) for...

This paper experimentally investigates how fair value measurements of financial instruments affect the decision of nonprofessional investors to invest in a bank’s shares. Specifically, we assess how investors respond to variations in net income resulting from fair value adjustments in trading...

This paper assesses the influence of an adoption of IAS/IFRS or US GAAP on the financial analysts’ forecast accuracy in a homogenous institutional framework. Our findings suggest that the forecast accuracy is higher for estimates based on IFRS or US GAAP data than for forecasts based on German...

This study investigates recent reforms in financial reporting enforcement in Germany. The objective of these reforms was to promote a consistent and faithful application of accounting standards. Using a difference-in-differences approach, we find some evidence of a decrease in earnings...

On the background of regulatory initiatives that mandate the establishment of comparable enforcement systems in EU jurisdictions to ascertain consistent and faithful application of IFRS, this paper provides capital-market-based evidence on investor reactions for one specific institutional...