Cross-Country evolution of financial reporting and governance practices through fuzzy C-Means and topsis algorithms
Romanian Journal of Economic Forecasting, vol.27, no.2, pp.67-85, 2024 (SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 27 Issue: 2
- Publication Date: 2024
- Journal Name: Romanian Journal of Economic Forecasting
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, EconLit
- Page Numbers: pp.67-85
- Keywords: FCM, Financial performance, Governance, IFRS, TOPSIS
- Ankara Haci Bayram Veli University Affiliated: Yes
Abstract
In an era of ever-evolving global economic dynamics and governance frameworks, this study aims to cluster OECD countries based on their similarities in terms of their compliance with International Financial Reporting Standards (IFRS) and evaluates the performance of the countries in these clusters regarding their adoption of IFRS. For this purpose, 11 indicators as countries adopted IFRS, which essentially measure the quality of governance, were used in Fuzzy C-Means (FCM) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) algorithms. The FCM algorithm captures the dynamic interrelations among the indicators, allowing for comprehensive modeling of complex systems. The TOPSiS algorithm further facilitates a sophisticated analysis by ranking countries, providing a clear and insightful classification that reflects their proximity to an idealized spectrum of financial and governance excellence. The findings reveal significant insights into the drivers of financial performance and governance quality.