The impact of IFRS introduction by listed Moroccan companies on financial performance: The mediating role of the cost of capital
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Author(s)Yassine OubahouLink to ORCID Index: https://orcid.org/0009-0009-9315-9849
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Khalid El OuafaLink to ORCID Index: https://orcid.org/0009-0005-9955-0997
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DOIhttp://dx.doi.org/10.21511/imfi.21(4).2024.17
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Article InfoVolume 21 2024, Issue #4, pp. 214-225
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Creative Commons Attribution 4.0 International License
This study aims to examine the direct and indirect impact of IFRS adoption on the financial performance of Moroccan companies listed on the Moroccan financial market. The analyses are based on data drawn from the financial statements of 21 Moroccan companies listed on the Casablanca Stock Exchange. By measuring financial performance using three stock market measures, namely the Mariss ratio, the Price Earnings Ratio, and the Tobin Q ratio, and using the structural equation method with SPSS AMOS software, the results indicate that before the introduction of the cost of capital variable, IFRS significantly affect financial performance, with an estimated coefficient of 0.395 significant at the 5% threshold. By introducing the cost of capital variable, the results show that the direct and significant relationship between IFRS and performance disappears, recording an estimated coefficient of 0.241 with a non-significant probability level of 0.243. On the other hand, the results show that the estimated coefficients for the indirect effect of IFRS on financial performance are negative, i.e., a coefficient of –0.099 estimating the direct effect of IFRS on the cost of capital and a coefficient of –2.621 estimating the direct effect of the cost of capital on financial performance, significant at the 1% and 5% thresholds, respectively. This confirms the hypothesis that the transition to IFRS indirectly and totally influences financial performance via the cost of capital variable.
- Keywords
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JEL Classification (Paper profile tab)G11, G15, M41
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References46
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Tables6
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Figures1
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- Figure 1. Conceptual research model
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- Table 1. Suitability index values for the direct model (without meditator variable)
- Table 2. Fit indices after introduction of the median variable
- Table 3. Test results on the relationship between IFRS and financial performance
- Table 4. Overview of the effect of IFRS adoption on financial performance
- Table 5. Significance of the relationships established between IFRS and financial performance
- Table A1. List of sample companies
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