Accounting quality and loan contract–Evidence from China

• Main Authors: Chia-Ching Huang, 黃家慶
• Other Authors: Hai-Chin Yu
• Format: Others
• Language: en_US
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/3ab9pq

碩士 === 中原大學 === 國際經營與貿易研究所 === 106 === This paper uses Dechow-Dichev model to measure accounting quality and examines its relationship with loan contract. Our univariate analysis shows firms with better accounting quality differ significantly from firms with worse accounting quality in terms of loan contracting, all-in-drawn spread, loan amounts, maturity, and collaterals. Firms with better accounting quality have lower spread, longer maturity, larger amounts, and less collateral on loan contracting than firms with worst accounting quality. A regression of accounting quality shows firms with better accounting quality have lower spread, longer maturity, and lower probability to provide collateral than firms with worse accounting quality. Moreover, accounting quality has a significant impact on all-in-drawn spread in China. Thus, accounting quality plays an important role in the decision-making of banks in China.