Increase in Leverage Driven by International Financial Reporting Standards Adoption

Tristão, Pâmela Amado; Sonza, Igor Bernardi

doi:10.1590/1982-7849rac2021200157.en

Pâmela Amado Tristão ^** Corresponding Author

Universidade Federal do Rio Grande, Instituto de Ciências Econômicas, Administrativas e Contábeis, Rio Grande, RS, Brazil

Pâmela Amado Tristão*, Universidade Federal do Rio Grande, Instituto de Ciências Econômicas, Administrativas e Contábeis, Rio Grande, RS, Brazil. Av. Itália, s/n, Km 8, Carreiros, Rio Grande, RS, Brazil. E-mail address: pamelamado@hotmail.com https://orcid.org/0000-0002-8408-6942

http://orcid.org/0000-0002-8408-6942

Igor Bernardi Sonza

Universidade Federal de Santa Maria, Centro de Ciências Sociais e Humanas, Departamento de Ciências Administrativas, Santa Maria, RS, Brazil.

Igor Bernardi Sonza, Universidade Federal de Santa Maria, Centro de Ciências Sociais e Humanas, Departamento de Ciências Administrativas, Santa Maria, RS, Brazil. Av. Roraima, nº 1000, Camobi, 97105-340, Santa Maria, RS, Brazil. E-mail address: igorsonza@gmail.com https://orcid.org/0000-0001-5403-3279

http://orcid.org/0000-0001-5403-3279

* Corresponding Author

Editor-in-chief: Wesley Mendes-Da-Silva (Fundação Getulio Vargas, EAESP, Brazil)

Pâmela Amado Tristão*, Universidade Federal do Rio Grande, Instituto de Ciências Econômicas, Administrativas e Contábeis, Rio Grande, RS, Brazil. Av. Itália, s/n, Km 8, Carreiros, Rio Grande, RS, Brazil. E-mail address: pamelamado@hotmail.com https://orcid.org/0000-0002-8408-6942

Igor Bernardi Sonza, Universidade Federal de Santa Maria, Centro de Ciências Sociais e Humanas, Departamento de Ciências Administrativas, Santa Maria, RS, Brazil. Av. Roraima, nº 1000, Camobi, 97105-340, Santa Maria, RS, Brazil. E-mail address: igorsonza@gmail.com https://orcid.org/0000-0001-5403-3279

Authors' Contributions

1^st author: conceptualization (equal); data curation (equal); formal analysis (equal); funding acquisition (equal); investigation (equal); methodology (equal); resources (equal); software (equal); supervision (equal); validation (equal); visualization (equal); writing-original draft (equal); writing-review & editing (equal). 2^nd author: conceptualization (equal); data curation (equal); formal analysis (equal); funding acquisition (equal); investigation (equal); methodology (equal); project administration (equal); resources (equal); software (equal); supervision (equal); validation (equal); visualization (equal); writing-original draft (supporting); writing-review & editing (supporting).

Conflict of Interests

The authors have stated that there is no conflict of interest.

Variable	Code	Measure	Previous studies
Total market leverage	TML	(current liabilities + non-current liabilities) / market value of assets	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008... ; Rajan and Zingales (1995)Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460. https://doi.org/10.1111/j.1540-6261.1995.tb05184.x https://doi.org/10.1111/j.1540-6261.1995...
Total book leverage	TBL	(current liabilities + non-current liabilities) / book value of assets	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008... ; Rajan and Zingales (1995)Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460. https://doi.org/10.1111/j.1540-6261.1995.tb05184.x https://doi.org/10.1111/j.1540-6261.1995...
Long-term market leverage	LTML	(non-current liabilities / market value of assets)	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008...
Long-term book leverage	LTBL	(non-current liabilities / book value of assets)	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008...
Net indebtedness	NI	(current liabilities + non-current liabilities) - cash available / total assets	DeAngelo and Roll (2015)DeAngelo, H., & Roll, R. (2015). How stable are corporate capital structures? The Journal of Finance, 70(1), 373-418. https://doi.org/10.1111/jofi.12163 https://doi.org/10.1111/jofi.12163... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008...

Variable and code	Measure	Previous studies	Signal
Panel A: Profitability
Return on equity (ROE)	Net profit / Equity	Frank and Goyal (2009)Devos, E., Rahman, S., & Tsang, D. (2017). Debt covenants and the speed of capital structure adjustment. Journal of Corporate Finance, 45, 1-18. https://doi.org/10.1016/j.jcorpfin.2017.04.008 https://doi.org/10.1016/j.jcorpfin.2017.... ; Graham, Leary, and Roberts (2015)Gatsios, R. C., Silva, J. M., Ambrozini, M. A., Assaf Neto, A., & Lima, F. G. (2016). Impact of adopting IFRS standard on the equity cost of Brazilian open capital companies. RAM. Revista de Administração da Mackenzie, 17(4), 85-108. https://doi.org/10.1590/1678-69712016/administracao.v17n4p84-107 https://doi.org/10.1590/1678-69712016/ad... ; Lemmon et al. (2008)Locan, T. R., & Caldeira, J. F. (2014). Estrutura de capital, liquidez de caixa e valor da empresa: Estudo de empresas brasileiras cotadas em bolsa. Revista Contabilidade & Finanças-USP, 25(64), 46-59. https://doi.org/10.1590/S1519-70772014000100005 https://doi.org/10.1590/S1519-7077201400...	Neg./Pos.
Free cash flow (FCL)	$[EBIT \times (1 - Tax) + Depreciation - Capex] / Total assets$	Lemmon et al. (2008)Locan, T. R., & Caldeira, J. F. (2014). Estrutura de capital, liquidez de caixa e valor da empresa: Estudo de empresas brasileiras cotadas em bolsa. Revista Contabilidade & Finanças-USP, 25(64), 46-59. https://doi.org/10.1590/S1519-70772014000100005 https://doi.org/10.1590/S1519-7077201400...	Neg./Pos.
Panel B: Firm size
Total assets (TA)	Log of assets	Devos, Rahman, and Tsang (2017)Devos, E., Rahman, S., & Tsang, D. (2017). Debt covenants and the speed of capital structure adjustment. Journal of Corporate Finance, 45, 1-18. https://doi.org/10.1016/j.jcorpfin.2017.04.008 https://doi.org/10.1016/j.jcorpfin.2017.... ; Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008...	Neg./Pos.
Equity (PL)	Log of equity	Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	Neg./Pos.
Net sales (R)	Log of net sales	DeAngelo and Roll (2015)DeAngelo, H., & Roll, R. (2015). How stable are corporate capital structures? The Journal of Finance, 70(1), 373-418. https://doi.org/10.1111/jofi.12163 https://doi.org/10.1111/jofi.12163... ; Devos et al. (2017)Devos, E., Rahman, S., & Tsang, D. (2017). Debt covenants and the speed of capital structure adjustment. Journal of Corporate Finance, 45, 1-18. https://doi.org/10.1016/j.jcorpfin.2017.04.008 https://doi.org/10.1016/j.jcorpfin.2017.... ; Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Graham et al. (2015)Graham, J. R., Leary, M. T., & Roberts, M. R. (2015). A century of capital structure: The leveraging of corporate America. Journal of Financial Economics, 118(3), 658-683. https://doi.org/10.1016/j.jfineco.2014.08.005 https://doi.org/10.1016/j.jfineco.2014.0... ; Rajan and Zingales (1995)Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460. https://doi.org/10.1111/j.1540-6261.1995.tb05184.x https://doi.org/10.1111/j.1540-6261.1995...	Neg./Pos.
Panel C: Growth opportunities
Change in log assets (LMA)	$Log of total assets - Log of total {assets}_{t - 1}$	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009...	Neg./Pos.
Capex (CAP)	Capital expenditure / Total assets	Axelson, Jenkinson, Strömberg, and Weisbach (2013)Axelson, U., Jenkinson, T., Strömberg, P., & Weisbach, M. S. (2013). Borrow cheap, buy high? The determinants of leverage and pricing in buyouts. The Journal of Finance, 68(6), 2223-2267. https://doi.org/10.1111/jofi.12082 https://doi.org/10.1111/jofi.12082... ; Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Locan and Caldeira (2014)Locan, T. R., & Caldeira, J. F. (2014). Estrutura de capital, liquidez de caixa e valor da empresa: Estudo de empresas brasileiras cotadas em bolsa. Revista Contabilidade & Finanças-USP, 25(64), 46-59. https://doi.org/10.1590/S1519-70772014000100005 https://doi.org/10.1590/S1519-7077201400...	Neg./Pos.
Panel D: Investment opportunities
Tobin's Q (Q)	${(MVE + PS + D)}^{1} / Total assets$	Catapan and Colauto (2015)Catapan, A., & Colauto, R. D. (2015). Governança corporativa: Uma análise de sua relação com o desempenho econômico-financeiro de empresas cotadas no Brasil nos anos de 2010-2012. Contaduría y Administración, 59(3), 137-164. https://doi.org/10.1016/S0186-1042(14)71268-9 https://doi.org/10.1016/S0186-1042(14)71...	Neg.
Panel E: Nature of assets
Tangibility (TAN)	$(Inventories + Fixed assets) / Total assets$	DeAngelo and Roll (2015)DeAngelo, H., & Roll, R. (2015). How stable are corporate capital structures? The Journal of Finance, 70(1), 373-418. https://doi.org/10.1111/jofi.12163 https://doi.org/10.1111/jofi.12163... ; Graham et al. (2015)Graham, J. R., Leary, M. T., & Roberts, M. R. (2015). A century of capital structure: The leveraging of corporate America. Journal of Financial Economics, 118(3), 658-683. https://doi.org/10.1016/j.jfineco.2014.08.005 https://doi.org/10.1016/j.jfineco.2014.0... ; Kieschnick and Moussawi (2018)Kieschnick, R., & Moussawi, R. (2018). Firm age, corporate governance, and capital structure choices. Journal of Corporate Finance, 48, 597-614. https://doi.org/10.1016/j.jcorpfin.2017.12.011 https://doi.org/10.1016/j.jcorpfin.2017.... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008... ; Tarantin and Valle (2015)Tarantin, W. T. Junior, & Valle, M. R. (2015). Estrutura de capital: O papel das fontes de financiamento nas quais companhias abertas brasileiras se baseiam. Revista Contabilidade & Finança, 26(69), 331-344. https://doi.org/10.1590/1808-057x201512130 https://doi.org/10.1590/1808-057x2015121...	Neg./Pos.
Panel F: Risk
Beta- systematic risk (SR) ² 2 Is the coefficient on the stock market portfolio from a market model regression. Each beta is calculated yearly with the monthly stock return regressions.	$R_{t} = α + β R_{M, t} + ε_{t}$	Scholtz (2014)Scholtz, H. D. (2014). Is systematic risk diversifiable? Presentation of a portfolio model that eliminates systematic risk. Social Science Research Network. https://doi.org/10.2139/ssrn.2533943 https://doi.org/10.2139/ssrn.2533943... ; Vancin, Kirch, Perlin and Mastella (2009)Vancin, D., Kirch, G., Perlin, M. & Mastella, M. (2019, July). The Impact of Board Gender-Diversity in Brazilian Firms Performance and Risk. In: Encontro Brasileiro de Finanças, Rio de Janeiro, RJ, Brasil, 19.	Pos.
Panel G: Tax
Tax benefits (BF)	$(Income tax \times Financial espenditure) / Total assets$	Frank and Goyal (2009)Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: Which factors are reliably important? Financial Management, 38(1), 1-37. https://doi.org/10.1111/j.1755-053X.2009.01026.x https://doi.org/10.1111/j.1755-053X.2009... ; Lemmon et al. (2008)Lemmon, M. L., Roberts, M. R., & Zender, J. F. (2008). Back to the beginning: Persistence and the cross-section of corporate capital structure. The Journal of Finance, 63(4), 1575-1608. https://doi.org/10.1111/j.1540-6261.2008.01369.x https://doi.org/10.1111/j.1540-6261.2008...	Pos.
Panel H: Corporate governance
Ownership structure of the major shareholder (APC)	% of voting share held by the major shareholder	Colombo and Caldeira (2018)Colombo, J. A., & Caldeira, J. F. (2018). The role of taxes and the interdependence among corporate financial policies: Evidence from a natural experiment. Journal of Corporate Finance, 50, 402-423. https://doi.org/10.1016/j.jcorpfin.2017.09.007 https://doi.org/10.1016/j.jcorpfin.2017.... ; Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	Neg./Pos.
Ownership structure of the three principal shareholder (TPAC)	% of voting share held by the three principal shareholder	Colombo and Caldeira (2018)Colombo, J. A., & Caldeira, J. F. (2018). The role of taxes and the interdependence among corporate financial policies: Evidence from a natural experiment. Journal of Corporate Finance, 50, 402-423. https://doi.org/10.1016/j.jcorpfin.2017.09.007 https://doi.org/10.1016/j.jcorpfin.2017.... ; Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	Neg./Pos.
Ownership structure of the five principal shareholder (CPAC)	% of voting share held by the five principal shareholder	Colombo and Caldeira (2018)Colombo, J. A., & Caldeira, J. F. (2018). The role of taxes and the interdependence among corporate financial policies: Evidence from a natural experiment. Journal of Corporate Finance, 50, 402-423. https://doi.org/10.1016/j.jcorpfin.2017.09.007 https://doi.org/10.1016/j.jcorpfin.2017.... ; Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	Neg./Pos.
Dummies
Sector fixed effect (Sector FE)	Dummies: 1 for sector firms, 0 otherwise	Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	-
Time fixed effects (Time FE)	Dummies: 1 for allocated time, 0 otherwise	Sonza and Kloeckner (2014)Sonza, I. B., & Kloeckner, G. O. (2014). Governança em estruturas proprietárias concentradas: Novas evidências para o Brasil. Revista de Administração, 49(2), 322-338. https://doi.org/10.5700/rausp1149 https://doi.org/10.5700/rausp1149...	-

Treatment group
Before IFRS							After IFRS
Var.	(n)	Mean	Med.	Min.	Max.	SD	(n)	Mean	Med.	Min.	Max.	SD	t
TML	129	1.15	0.37	0.01	24.57	2.84	126	2.67	0.59	0.01	24.57	5.99	-4.52	^* ***** indicates statistical significance at 1%.
TBL	636	0.52	0.54	0.07	2.65	0.28	605	0.51	0.55	0.07	2.65	0.29	0.86
LTML	129	0.57	0.17	0.00	11.86	1.43	126	1.32	0.32	0.00	11.86	2.90	-4.42	^* ***** indicates statistical significance at 1%.
LTBL	636	0.25	0.23	0.00	1.01	0.20	605	0.27	0.29	0.00	1.01	0.20	-2.33	^* ***** indicates statistical significance at 1%.
NI	636	0.15	0.13	-0.17	1.05	0.21	605	0.14	0.14	-0.17	1.05	0.19	1.17
Control group
Before IFRS							After IFRS
Var.	(n)	Mean	Med.	Min.	Max.	SD	(n)	Mean	Med.	Min.	Max.	SD	t
TML	72	1.13	0.19	0.01	24.57	3.23	94	2.14	0.45	0.01	24.57	5.57	-2.66	^* ***** indicates statistical significance at 1%.
TBL	286	0.51	0.53	0.07	0.98	0.20	352	0.54	0.56	0.07	0.94	0.19	-3.02	^* ***** indicates statistical significance at 1%.
LTML	72	0.66	0.10	0.00	11.86	1.70	94	1.14	0.30	0.00	11.86	2.77	-2.42	^* ***** indicates statistical significance at 1%.
LTBL	286	0.25	0.27	0.00	0.79	0.17	352	0.29	0.30	0.00	0.78	0.15	-3.37	^* ***** indicates statistical significance at 1%.
NI	285	0.08	0.07	-0.17	0.95	0.20	352	0.17	0.14	-0.17	0.93	0.18	-7.14	^* ***** indicates statistical significance at 1%.

	TML	(n)	TBL	(n)	LTML	(n)	LTBL	(n)	NI	(n)
Before
Treated	0.080	46	0.540	46	0.034	46	0.232	46	0.226	46
Control	0.121	30	0.483	30	0.082	30	0.277	30	0.082	30
Difference	-0.041		0.057		-0.048		-0.045		0.144^* ***** indicate statistical significance at 5% and 1%, respectively.
SD	(0.095)		(0.060)		(0.047)		(0.042)		(0.040)
t	-0.43		0.96		-1.03		-1.08		3.59
After
Treated	0.268	126	0.516	605	0.132	126	0.279	605	0.148	605
Control	0.071	42	0.552	42	0.043	42	0.347	42	0.131	42
Difference	0.197^* ***** indicate statistical significance at 5% and 1%, respectively.		-0.036		0.089^ and		-0.069^ and		0.017
SD	(0.071)		(0.042)		(0.035)		(0.029)		(0.028)
T	2.78		0.85		2.56		2.34		0.60
DID	0.238^ and		-0.093		0.138^ and		-0.024		-0.127^* ***** indicate statistical significance at 5% and 1%, respectively.
SD	(0.119)		(0.073)		(0.058)		(0.051)		(0.049)
T	2.01		1.28		2.36		0.47		2.59

Variable	TML (n = 185)	TBL (n = 185)	LTML (n = 185)	LTBL (n = 185)	NI (n = 185)
DID	0.14**	0.07	0.07**	-0.03	0.05
SD	(0.07)	(0.04)	(0.03)	(0.02)	(0.04)
t	2.05	1.61	2.06	-1.26	1.14
SR	-0.03	0.03	-0.01	0.04**	0.00
SD	(0.03)	(0.02)	(0.01)	(0.01)	(0.02)
t	-1.14	1.53	-0.86	2.24	0.44
ROE	-0.44***	0.03	-0.18***	0.06	-0.11
SD	(0.15)	(0.09)	(0.06)	(0.05)	(0.07)
t	-2.84	0.32	-2.97	1.18	-1.44
PL	0.03**	0.02**	0.01*	0.02***	0.01
SD	(0.01)	(0.11)	(0.00)	(0.00)	(0.01)
t	1.98	2.17	1.86	2.84	0.99
TAN	-0.26***	-0.13*	-0.10**	0.05	-0.02
SD	(0.09)	(0.08)	(0.04)	(0.05)	(0.07)
t	-2.83	-1.71	-2.11	0.97	-0.38
Q	-	-0.03***	-	-0.03***	-0.01
SD	-	(0.00)	-	(0.00)	(0.00)
t	-	-4.98	-	-5.04	-1.14
CAP	-0.28***	-0.27***	-0.11**	0.06	-0.33***
SD	(0.09)	(0.08)	(0.04)	(0.04)	(0.11)
t	-3.11	-3.35	-2.47	1.38	-2.87
BF	-0.04**	-0.07***	-0.02**	-0.05***	-0.02**
SD	(0.02)	(0.01)	(0.01)	(0.01)	(0.01)
t	-2.00	-5.43	-1.97	-5.09	-2.20
APC	-0.01	0.15***	0.00	0.10**	0.07
SD	(0.07)	(0.05)	(0.03)	(0.04)	(0.05)
t	-0.17	2.71	-0.12	2.41	1.31
Constant	-0.50*	-0.14	-0.25	-0.35**	-0.21
SD	(0.28)	(0.20)	(0.14)	(0.14)	(0.21)
t	-1.74	-0.72	-1.77	-2.53	-1.02
Sector FE	Yes	Yes	Yes	Yes	Yes
Time FE	Yes	Yes	Yes	Yes	Yes
R²	0.24	0.49	0.22	0.56	0.43

	Placebo: Event year (2014)
	TML	(n)	TBL	(n)	LTML	(n)	LTBL	(n)	NI	(n)
Before
Treated	0.154	40	0.518	124	0.076	40	0.273	124	0.171	124
Control	0.101	28	0.557	126	0.060	28	0.309	126	0.175	126
Difference	0.054		-0.039		0.016		-0.036		-0.005
SD	(0.165)		(0.034)		(0.077)		(0.025)		(0.025)
T	0.32		-1.15		0.21		-1.41		-0.19
After
Treated	0.594	121	0.509	566	0.267	121	0.272	566	0.139	566
Control	0.065	3	0.508	11	0.014	3	0.260	11	0.157	11
Difference	0.528		0.001		0.252		0.012		-0.018
SD	(0.421)		(0.077)		(0.195)		(0.058)		(0.056)
T	1.26		0.02		1.29		0.21		0.33
DID	0.474		0.040		0.236		0.048		-0.014
SD	(0.452)		(0.084)		(0.210)		(0.063)		(0.062)
T	1.05		0.48		1.12		0.76		0.22

Treatment group
Before IFRS							After IFRS
Var.	(n)	Mean	Med.	Min.	Max.	SD	(n)	Mean	Med.	Min.	Max.	SD	t
ROE	634	0.08	0.10	-0.90	0.82	0.33	605	0.04	0.08	-0.90	0.82	0.30	5.20	***
TA¹	636	15.60	1.57	0.01	1.01²	72.90	605	18.80	1.56	11.00	586.00	71.3	-1.00
PL¹	636	5.67	0.63	0.01	273.00	25.80	605	9.16	0.69	4.12	429.00	42.00	-1.26
R¹	634	8.65	0.86	-1.41	546.00	44.00	605	9.35	0.64	0.00	419.00	45.60	-0.65
FCL	636	-0.25	-0.23	-0.85	0.09	0.23	605	-0.20	-0.15	-0.85	0.09	0.26	-3.55	***
Q	129	2.34	1.72	0.26	14.13	2.41	129	1.85	1.21	0.25	14.13	2.38	0.80
TAN	636	0.30	0.31	0.00	0.77	0.23	605	0.23	0.18	0.00	0.77	0.24	6.94	***
LMA	423	11.57	11.69	7.05	15.49	2.29	428	11.84	12.03	7.05	15.49	2.34	-0.52
CAP	636	0.07	0.00	0.00	0.66	0.17	605	0.07	0.00	0.00	0.66	0.19	-2.03	**
BF	634	-0.57	-0.44	-8.06	2.24	1.80	605	-0.35	-0.39	-8.06	2.24	1.45	-1.94	**
SR	455	0.67	0.67	-0.99	2.20	0.81	424	0.57	0.59	-0.99	2.20	0.72	1.43	*
APC	671	0.61	0.59	0.15	0.99	0.27	768	0.60	0.58	0.15	0.99	0.28	1.74	**
TPAC	671	0.79	0.85	0.34	1.00	0.19	768	0.77	0.81	0.34	1.00	0.21	2.54	***
CPAC	671	0.84	0.89	0.42	1.00	0.16	768	0.81	0.87	0.42	1.00	0.18	3.23	***
Control Group
Before IFRS							After IFRS
Var.	(n)	Mean	Med	Min	Max	SD	(n)	Mean	Med	Min	Max	SD	t
ROE	286	0.10	0.10	-0.90	0.82	0.25	352	0.11	0.11	-0.90	0.82	0.21	2.40	***
TA	286	6.15	2.88	0.04	68.30	8.51	352	7.58	4.03	0.10	65.20	9.78	-2.42	***
PL	286	2.56	1.19	0.00	31.70	4.43	352	3.11	1.67	0.02	29.70	4.60	-1.69	**
R	286	3.34	1.28	0.00	55.20	5.75	352	4.26	1.69	0.00	96.30	9.05	-1.64	*
FCL	286	-0.17	-0.11	-0.85	0.09	0.22	352	-0.11	-0.03	-0.80	0.09	0.22	-3.82	***
Q	72	2.50	2.17	0.25	9.97	1.95	94	1.96	1.37	0.25	10.97	1.84	2.70	***
TAN	286	0.25	0.19	0.00	0.77	0.23	352	0.19	0.09	0.00	0.77	0.21	4.54	***
LMA	220	12.75	12.95	7.05	15.49	1.58	291	13.03	13.23	7.95	15.49	1.42	-1.46	*
CAP	285	0.01	0.00	0.00	0.66	0.06	352	0.05	0.00	0.00	0.66	0.16	-4.31	***
BF	286	-0.25	-0.06	-8.06	2.24	1.40	352	-0.33	-0.36	-4.82	2.24	1.09	3.53	***
SR	272	0.98	0.97	-0.99	2.20	0.63	353	0.92	0.88	-0.99	2.20	0.57	1.78	**
APC	140	0.58	0.52	0.15	0.99	0.27	228	0.52	0.48	0.15	0.99	0.28	2.83	***
TPAC	140	0.76	0.79	0.34	1.00	0.21	228	0.71	0.73	0.34	1.00	0.23	2.86	***
CPAC	137	0.80	0.86	0.42	1.00	0.18	225	0.75	0.77	0.42	1.00	0.20	2.51	***

[1] * Corresponding Author

Brasil

Brasil

Increase in Leverage Driven by International Financial Reporting Standards Adoption

Incremento na Alavancagem Impulsionado pela Adoção do Padrão Internacional Contábil

ABSTRACT

Context:

Objective:

Method:

Conclusions: