This paper examines the nature of the relationship between financial development and economic growth between 1965 and 2019, using the non-linear logistic smooth transition regression model and considering inflation as a threshold financial development. The results show the existence of a non-linear abrupt relationship with an inflation threshold equal to 3.63%. Specifically, when inflation is below 3.63 percent, all variables, including inflation, have a significant and positive impact on economic growth. However, when inflation exceeds the estimated threshold, inflation has a significant and negative impact with an elasticity equal to -0.365. Therefore, it is necessary to apply such measures to reduce the inflation pressures and promote economic growth through development finance by the banking sector. JEL Classification: C24; E31; E44; O11.

This study examines the effect of IFRS mandatory adoption on economic growth in 17 European countries via the Cost of Capital between 1994 and 2021 using PMG-ARDL and GMM-system techniques. The results show that IFRS adoption in European countries positively affects economic growth. This implies that the adoption of IFRS in these countries has led to improvements in financial reporting quality, which has positively impacted investment decisions and stimulated economic growth. These results provide insights into the benefits of adopting international accounting standards and highlight the importance of institutional and financial factors in shaping the economic impact of adopting accounting standards. JEL Classification: C23; M40; O11; O52.

This study analyzes the impact of adopting International Financial Reporting Standards (IFRS) on the cost of equity capital for firms listed on STOXX Europe 600 using a sample of 9773 firm-year observations between 1994 and 2022. We estimate the cost of equity capital using the modified price–earnings–growth ratio model and employ the GMM system to investigate the effect of IFRS Standards on the cost of equity capital. Our results indicate that IFRS adoption reduces firms’ cost of equity capital. We performed various sensitivity analyses to ensure the reliability of our results. Overall, this study contributes to the extant literature on the cost of equity capital implications of IFRS adoption and provides valuable insights for investors, regulators, and policymakers.