Disclosure quality and loan contracting: Evidence from East Asian syndicated loan markets

• Main Authors: Jhang, Yi-Hao, 張翊毫
• Other Authors: 詹凌菁
• Format: Others
• Language: en_US
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/395fkg

碩士 === 國立政治大學 === 會計學系 === 107 === In this paper, I examine whether and how a firm’s disclosure quality of financial statements is associated with the terms of loan contracts. Following the parsimonious disclosure quality measure (DQ) constructed by Chen, Miao, and Shevlin (2015) which captures the disaggregation level of accounting line items, I find that banks provide higher spreads and more stringent non-price terms to firms with lower DQ. Moreover, I examine the effect of DQ on legal traditions of common law and civil law, I find that firms providing less disaggregated financial statements receive unfavorable loan spreads in countries of civil law origins. Additional analyses reveal that borrowers with low DQ receive unfavorable loan spreads, smaller loan amounts, and shorter maturities when foreign banks are involved in lending. Besides, I find that the size of syndicate becomes larger when lending to borrowers with lower DQ. To conclude, my findings suggest that the incremental information in DQ is valuable to banks in determining loan contract terms.