Financial reporting quality and optimal capital structure

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE Journal of Business Finance & Accounting Pub Date : 2023-04-04 DOI:10.1111/jbfa.12697

Christina Synn, Christopher D. Williams

引用次数: 0

Abstract

We investigate the role of financial reporting quality in reducing a firm's over- and underleverage problems. While the prior literature examining reporting quality and capital structure has focused on observed capital structure, research suggests that financing frictions arising from adverse selection concerns can result in differences between observed and optimal capital structures. Using the deviation from a predicted model of optimal capital structure, we find that approximately a third of firms that have more leverage than their industry's median firm are in fact underlevered and more than 15% of firms that have less leverage than their industry's median firm are in fact overlevered. Building off a large literature that provides evidence that financial reporting quality can mitigate adverse selection concerns and reduce financing frictions, we find that a firm's deviation from the predicted model of optimal capital structure is decreasing in financial reporting quality, and these results are larger in magnitude for firms that are overlevered.

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财务报告质量和最佳资本结构

我们研究了财务报告质量在减少公司杠杆率过高和过低问题中的作用。以往研究报告质量和资本结构的文献主要关注观察到的资本结构，而研究表明，逆向选择引起的融资摩擦会导致观察到的资本结构与最优资本结构之间的差异。利用与最优资本结构预测模型的偏差，我们发现，在杠杆率高于行业中位数的公司中，约三分之一的公司实际上杠杆率不足，而在杠杆率低于行业中位数的公司中，超过 15%的公司实际上杠杆率过高。大量文献证明，财务报告质量可以缓解逆向选择问题并减少融资摩擦，在此基础上，我们发现，企业偏离最优资本结构预测模型的程度随财务报告质量的提高而降低，而这些结果在杠杆率过高的企业中幅度更大。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.

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