Impacts of mandatory international financial reporting standards adoption on foreign shareholdings of public listed companies in Malaysia

This research examines the direct effects of IFRS adoption on foreign shareholdings and tests intervening effects of investor protection, stock market development, and auditor quality on the relationship. Results suggest that IFRS adoption had no significatn positive effect on foreign shareholdings in Malaysia. Also, investor protection failed to moderate the relationship between IFRS adoption and foreign shareholdings. However, stock market development and auditor quality have positive and negative moderating effects respectively in the relationship between IFRS adoption and foreign shareholding. Hence, Malaysian government should increase investor protection and stock market development in order to attract foreign capital through IFRS adoption.