Social identity and IPSAS adoption: cross-national evidence

Abstract

This study examines the relationship between social identity theory (SIT) and the extent to which adoption of International Public Sector Accounting Standards (IPSAS) is affected by diversity within countries. Data from 106 countries was used to examine the relationship between two SIT constructs and the level of IPSAS adoption. Diversity of cultural values was found to be important in explaining the differences among countries in their adoption of IPSAS. The findings did not support institutional and economic variables influencing adoption but, instead, demonstrated that SIT constructs have additional explanatory power. Empirical studies exploring the combination of diversity variables and IPSAS are lacking—therefore, this study contributes to other institutional dimensions that have been previously researched and adds to the literature in comparative studies in public sector accounting.