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Accruals Quality and Debt Maturity Structure
Author(s) -
GARCÍATERUEL PEDRO J.,
MARTÍNEZSOLANO PEDRO,
SÁNCHEZBALLESTA JUAN P.
Publication year - 2010
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.2010.00312.x
Subject(s) - endogeneity , unobservable , volatility (finance) , accrual , debt , quality (philosophy) , accounting , economics , panel data , business , econometrics , monetary economics , finance , earnings , philosophy , epistemology
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.