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Globalization, Transparency and Economic Growth - The Vulnerability of Chinese Firms to Macroeconomic Shocks

Oxelheim, Lars LU (2009)
Abstract
The process of globalization encompasses economic and financial integration. The abolition

of capital controls and the dismantling of barriers of different kinds will expose previously

sheltered companies to shocks on the global economic arena. Policy-makers in already

globalized countries have learned that market participants should be prepared in due time to

meet the new exposure to fluctuating rates of exchange, interest and inflation. China has

recently adopted a version of the International Financial Reporting Standards (IFRS) in an

effort to improve the quality of information available for risk management and for pricing of

risk. This paper analyzes the gains in... (More)
The process of globalization encompasses economic and financial integration. The abolition

of capital controls and the dismantling of barriers of different kinds will expose previously

sheltered companies to shocks on the global economic arena. Policy-makers in already

globalized countries have learned that market participants should be prepared in due time to

meet the new exposure to fluctuating rates of exchange, interest and inflation. China has

recently adopted a version of the International Financial Reporting Standards (IFRS) in an

effort to improve the quality of information available for risk management and for pricing of

risk. This paper analyzes the gains in transparency from the implementation of IFRS in

Europe as of January 2005 and reports no improvements in regard to the macroeconomic impact on firms. Based on this experience, improvements for Chinese adoption are suggested. The paper presents a framework for how to understand and measure the impact of different scenarios on corporate performance. It also elaborates on how to communicate the macroeconomic effects to external stakeholders of the firm in a way that should foster further economic growth in China. (Less)
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author
organization
publishing date
type
Working Paper
publication status
unpublished
subject
keywords
International Financial Reporting Standards, transparency, economic growth, macroeconomic impact, globalization
publisher
IFN Working Paper series
language
English
LU publication?
yes
id
a8fe769d-da87-4b2f-b8d6-328894e65da0 (old id 1514166)
date added to LUP
2009-12-30 09:32:06
date last changed
2016-07-06 09:52:34
@misc{a8fe769d-da87-4b2f-b8d6-328894e65da0,
  abstract     = {The process of globalization encompasses economic and financial integration. The abolition<br/><br>
of capital controls and the dismantling of barriers of different kinds will expose previously<br/><br>
sheltered companies to shocks on the global economic arena. Policy-makers in already<br/><br>
globalized countries have learned that market participants should be prepared in due time to<br/><br>
meet the new exposure to fluctuating rates of exchange, interest and inflation. China has<br/><br>
recently adopted a version of the International Financial Reporting Standards (IFRS) in an<br/><br>
effort to improve the quality of information available for risk management and for pricing of<br/><br>
risk. This paper analyzes the gains in transparency from the implementation of IFRS in<br/><br>
Europe as of January 2005 and reports no improvements in regard to the macroeconomic impact on firms. Based on this experience, improvements for Chinese adoption are suggested. The paper presents a framework for how to understand and measure the impact of different scenarios on corporate performance. It also elaborates on how to communicate the macroeconomic effects to external stakeholders of the firm in a way that should foster further economic growth in China.},
  author       = {Oxelheim, Lars},
  keyword      = {International Financial Reporting Standards,transparency,economic growth,macroeconomic impact,globalization},
  language     = {eng},
  note         = {Working Paper},
  publisher    = {IFN Working Paper series},
  title        = {Globalization, Transparency and Economic Growth - The Vulnerability of Chinese Firms to Macroeconomic Shocks},
  year         = {2009},
}