Celebrating Success: Professor Darren Duxbury, Professor Bartosz Gebka and Dr Chen Su

Congratulations to Professor Darren Duxbury, Professor Bartosz Gebka and Dr Chen Su, whose paper “A behavioral appraisal of regulatory financial reforms and implications for corporate management” co-authored with former PhD student Samah El Hajjar, has been accepted for publication in the British Journal of Management.

Abstract: In the paper we examine the capital market consequences of the mandatory adoption of International Financial Reporting Standards (IFRS) in Europe through the behavioral lens of investor sentiment, investigating changes in the irrational sentiment-return relationship pre/post-reform.  We find a significant weakening of the impact of irrational sentiment on stock prices in IFRS-adopting countries, both in absolute terms and relative to non-IFRS countries.  Hence, we show that the IFRS reform accomplished its ultimate aim of improving market efficiency.  Our findings are robust to an array of additional tests designed, among other things, to further isolate the effect of IFRS on the sentiment-return relationship.  Our research has far-reaching implications for corporate behavior and decision-making.