The impact of IFRS mandate and institutional governance on underpricing and aftermarket performance of IPO shares in Turkey

Financial Innovation

Table 9 The concurrent impact of institutional quality and IFRS on long-term performance

	Dependent variable is BHAR2Y
Post	− 0.114	− 0.305*	− 0.103	− 0.048	− 0.042	− 0.057
	(− 0.480)	(− 1.358)	(− 0.551)	(− 0.234)	(− 0.190)	(− 0.247)
Treatment	0.341	− 0.234	0.315*	0.346*	0.450**	0.432*
	(1.191)	(− 0.667)	(1.371)	(1.365)	(1.778)	(1.596)
(Voice and accountability) * IFRS	− 0.341*
	(− 1.340)
(Political stability) * IFRS		− 0.627***
		(− 2.547)
(Government effectiveness) * IFRS			0.734*
			(1.540)
(Regulatory quality) * IFRS				0.365
				(0.793)
(Control of corruption) * IFRS					0.050
					(0.104)
(Rule of law) * IFRS						− 0.197
						(− 0.387)
Firm-level controls	Included	Included	Included	Included	Included	Included
Market-level Controls	Included	Included	Included	Included	Included	Included
YE and IE	Included	Included	Included	Included	Included	Included
Observations	137	137	137	137	137	137
Adj. R²	0.347	0.375	0.354	0.343	0.340	0.341
Prob. of F-Statistics	0.000	0.000	0.000	0.000	0.000	0.000

The table presents the estimation results of the combined impact of institutional governance quality (6 measures obtained from the World Bank) and IFRS adoption on two years buy-and-hold (BHAR2Y) investment strategy. The estimation period is from 1998 to 2019. 2005 is excluded to avoid the probable impact of confounding forces during the transition year. Detailed definitions of variables are provided in Table 1. Numbers in parentheses are t-statistics adjusted according to Newey and West (1987). *** and ** indicate statistical significance at 1%, and 5% level, respectively