The impact of XBRL technology on stock market efficiency: evidence from emerging markets

Purpose This study aims to examine the impact of eXtensible Business Reporting Language (XBRL) technology adoption on the efficiency of the Amman Stock Exchange, specifically its implications on information asymmetry and trading volumes in the Jordanian banking industry. Design/methodology/approach This study uses a quantitative, comparative causal research approach based on agency and signalling theories. The analysis uses imbalanced panel data from 59 publicly traded financial firms spanning the years 2016–2021. This period includes both pre- and post-XBRL implementation phases, facilitating a comparative analysis of bid-ask spreads and daily trading volumes using the General Difference-in-Differences method. Findings This study found that XBRL adoption widens bid-ask spreads, showing increased information asymmetry and insider benefits despite the technology’s transparency goals. This finding supports agency theory and shows the challenges of addressing informational inequities. Post-XBRL implementation, average trading volumes decreased significantly, showing that market players may be deterred by complexity and higher information-processing costs during the early adoption phase. Research limitations/implications The increase in information asymmetry and decline in trade volumes demand more research into governance systems and XBRL efficacy techniques. Future studies should examine its long-term effects across industries and locations and how market actors’ technological preparation mitigates unexpected repercussions. Originality/value This study adds to the XBRL debate by showing that trading volumes fell and information asymmetry increased. These findings illuminate the pros and cons of XBRL adoption and emphasise the need to address technological differences and implementation quality.