دانلود رایگان مقاله انگلیسی کیفیت درآمد ها و دستیابی مدیریتی برای تامین مالی بدهی: شواهد تجربی از ایران - امرالد 2017

Abstract

Purpose – The purpose of this paper is to establish a linkage between two rarely researched areas, i.e. earnings quality (EQ) and access to external and internal debt financing. Specifically, the authors aim to examine whether the quality of a firm’s reported earnings is significantly associated with its access to both private and bank debt financing. Design/methodology/approach – The authors test the hypotheses by employing panel data analysis for a sample of 108 companies listed on the Tehran Stock Exchange (TSE) during 2006-2015. The tests were conducted by using R econometric software. Findings – After controlling for some firm-specific factors and consistent with the primary expectations, the results reveal a significant and positive relationship between EQ and managerial access to external (bank) debt financing. In addition, the findings indicate that EQ is negatively associated with internal debt financing which is measured as the changes in firm retained earnings. Research limitations/implications – Although the authors cautiously conducted the present study, there are some limitations that merit further consideration. First, the authors collected the data manually from 14 categories of industries in the TSE and, accordingly, an aggregate analysis across multiple categories of industries might have missed industry-specific and unique issues. Second, the authors used a narrow conceptualization of accruals quality which merely assesses a firm’s EQ. The measures can be enhanced by including more actionable proxies. Third, since the data on debt financing were collected from two different sources, this might have caused common method variance in the results procedurally. Originality/value – Since the fundamental institutional assumptions underpinning the Western and even East Asia debt contracting and EQ models are not valid in the institutional environment of Iran, the findings could provide substantial implications for the understanding of both debt financing and the quality of earnings. These significant institutional and ownership differences are the factors affecting firms’ leverage and capital choice decisions. Indeed, the study has laid some groundwork upon which a more detailed evaluation of the Iranian firms’ financial structure could be based.

6. Concluding remarks

The present study attempts to establish a linkage between EQ and managerial access to both external (bank) and internal (retained earnings and firm performance) debt financing Our primary conjecture lies in the fact that higher quality accounting information, in general, and higher quality earnings, in particular, reduce the risks of moral hazard and information asymmetry with respect to borrowers. More informative accounting accruals as the key component of earnings are regarded as the increased monitoring in the capital market and through private lenders. Our measure of EQ is based on accruals quality metrics developed by prior seminal works (e.g. Jones, 1991; Dechow et al., 1995; Dechow and Dichev, 2002; Francis et al., 2005). Moreover, we use six more constructs for EQ (derived from the time-series properties of earnings, selected qualitative characteristics in the FASB’s conceptual framework and the relations among income, cash and accruals) as alternative measures. Employing panel data analysis on a sample of 108 companies listed on the TSE, we find consistent evidence with our primary expectations and the prior literature on finance. Specifically, our results suggest a positive relationship between EQ (all metrics) and managerial access to bank debt financing and, by contrast, a negative relationship between EQ (all metrics) and managerial access to internal debt financing.

Our findings could provide new insights into the way creditors play the role of a monitoring leverage necessary to keep the quality of corporate financial reports at plausible levels. However, their monitoring role may not be effective in terms of internal financing, probably because corporate managers have more tendency to avoid costly debt covenant violations rather than report earnings of higher quality or earnings which are more informative about firm’s future cash flows. Furthermore, our study uses a sample of small -or medium-sized and financially constrained quoted firms operating in a developing capital market. Accordingly, the variations in the degree of access to external capital markets for relatively unconstrained firms could be considered as another factor in reporting higher quality earnings by the managers. More specifically, constrained firms (with relatively limited access to bank credit facilities) overcome their external financing constraints by accumulating more internal funds to finance higher growth.