Indian Journal of Science and Technology

Abstract

This study tests a hypothesis that if information access to foreign investors expands after the adoption of eXtensible Business Reporting Language (XBRL) and the associated information is incorporated into their trading behaviors, then their trading turnover ratio would significantly increase. As expected, I find that the trading turnover ratio of foreign investors significantly increases after XBRL adoption compared to before XBRL adoption. Furthermore, this study examines the difference in foreign investors’ trading behavior between small and large firms. I find that the increase in the foreign investor’s turnover ratio in small firms is more pronounced and economically significant than that of large firms. Overall, this study presents evidence that XBRL adoption affects the trading behaviors of foreign investors.
Keywords: Financial Reporting, Foreign Investor, Turnover Ratio, XBRL