Effects and Implications of Kazakhstan`s Ado - A Resource Dependence Perspective

Kazakhstan's early adoption of international financial reporting standards (IFRS) in 2004 and 2005 had significant economic consequences, including increased foreign direct investments, improved reporting quality, and early debt repayment.

Format: Paperback
Length: 172 pages
Publication date: 31 March 2021
Publisher: ibidem-Verlag, Jessica Haunschild u Christian Schon

Kazakhstan, a country with limited resources and underdeveloped infrastructure, took a bold step in 2004 by becoming the first CIS country to require international financial reporting standards (IFRS) for banks and in 2005 for all public companies. This important reform had significant economic consequences. In the 1990s, Kazakhstan's capital market reforms closely followed those of Russia due to their cooperative mode driven by resource interdependence and environmental uncertainty following the collapse of the Soviet Union. However, by 2003, dependence on external donors (the IMF and World Bank) took precedence over interdependence with Russia. As a result, Kazakhstan unilaterally adopted IFRS, while Russia backed away from this initiative. This study reports that Kazakhstan's inflow of foreign direct investments (FDI) was the greatest among the CIS nations following the adoption of IFRS. In addition, in 2005-11, Kazakhstani public firms' reporting quality was higher than that of Russian public firms operating in a similar environment but exempt from the IFRS reporting requirement. Kazakhstan was also the first CIS nation to repay its external debt ahead of schedule and to receive an investment grade from Moody's rating agency. The book concludes that Western-style capital market reforms in this emerging market with a not-so-distant communist past had significantly positive outcomes.

Weight: 666g
Dimension: 210 x 148 x 15 (mm)
ISBN-13: 9783838210377