Accruals Quality and Debt Maturity Structure

In this paper we use panel data and GMM estimation to examine the effect of accounting quality on debt maturity structure in a bank‐based financial system and show that, even after controlling for unobservable heterogeneity, endogeneity, variables reflecting operating volatility and the cost of debt...

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Bibliographic Details
Published in:Abacus (Sydney) 2010-06, Vol.46 (2), p.188-210
Main Authors: GARCÍA-TERUEL, PEDRO J., MARTÍNEZ-SOLANO, PEDRO, SÁNCHEZ-BALLESTA, JUAN P.
Format: Article
Language:English
Subjects:
Accounting
Accounting research
Accounting standards
Accounting theory
Accruals
Accruals quality
Asymmetric information
Debt
Debt maturity
Endogeneity
Estimating techniques
Impact analysis
Information asymmetry
Management
Maturity
Quality standards
Studies
Volatility
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Summary:In this paper we use panel data and GMM estimation to examine the effect of accounting quality on debt maturity structure in a bank‐based financial system and show that, even after controlling for unobservable heterogeneity, endogeneity, variables reflecting operating volatility and the cost of debt, firms with poor accounting quality face a shorter debt term than firms with higher accounting quality. This association between accounting quality and debt maturity is consistent with accounting quality as a means of reducing information asymmetry problems and improving the monitoring of managers.
ISSN:0001-3072
1467-6281
DOI:10.1111/j.1467-6281.2010.00312.x