The Effect of Firm Size and Rate of Inflation on Cost of Capital: The Role of IFRS Adoption in the World

The objective of this research is to examine the role of IFRS adoption in the relation between firms’ size and rate of inflation on cost of capital. Using a sample of 880 firm-year observations from 31 countries. This research finds that there is no evidence IFRS adoption has positive impact to reduce the cost of capital. This result shows listed firms in NYSE already made financial statement with complete information in a good quality standard. Since the firms should pay switching cost to change their financial statement's standard and countries need to make concurrent effort to improve their legal enforcement.