دانلود رایگان مقاله انگلیسی تاثیر سازماندهی مجدد دارایی های مادی بر هزینه های تامین مالی بدهی های خریدار - الزویر 2018

ABSTRACT

In this paper, we investigate whether material asset reorganizations (MARs), a special form of merger and acquisition (M&A) transactions, can affect the acquirers’ cost of debt financing. Further, we examine the effect of acquiring firms’ accounting information quality on the cost of debt and on the association between MARs and debt costs. We predict that compared to conventional M&As, large-scale acquisitions through MARs can generate a much greater influx of assets from target firms. This raises the acquirers’ asset collateral and thus reduces the cost of debt. Because the quality of accounting information is a key factor affecting the cost of debt, we suggest that it has a spillover effect on the debt-cost effect of MARs. Using M&A transactions by listed companies in the Chinese A-share market from 2008 to 2014 as our sample, we find that MARs are associated with a higher asset collateral and lower ex post cost of debt than conventional M&As. Furthermore, we show that the acquiring firms’ accounting information quality has a significant negative effect on debt costs, and the negative association between MARs and the cost of debt is more pronounced when accounting information quality is higher.

6. Conclusion

In this paper, we investigate whether MARs (as a special form of M&A transaction) are related to acquiring firms’ debt financing costs. Using a sample of listed companies’ M&A transactions in the Chinese A-share market, we find that MAR implementation can enable the acquirers to obtain a massive inflow of assets from target firms and gain significant asset collateral, and this can decrease the acquirers’ debt financing costs. Our results help to reveal the economic consequences of M&A transactions and enrich the current literature on debt financing. This paper also examines the role of accounting information quality in the M&A market. We show that acquiring firms’ accounting information quality has a significant negative effect on their debt financing costs. This result builds on studies that find a negative relationship between accounting information quality and debt costs. In addition, we find that the effect of MARs on the ex post cost of debt financing is stronger for acquiring firms that have higher quality accounting information. This result indicates the spillover effect of accounting information quality in the M&A setting, and helps to reveal the reinforcing mechanism of the MARs on debt cost.

Our paper sheds light on the consequences of M&A transactions in the debt market by investigating the association between MARs and debt costs with horizontal and longitudinal comparisons. At the same time, we provide direct evidence for the usefulness of accounting information, which has been subject to considerable debate in recent decades, by confirming the importance of the quality of accounting information in lowering the cost of debt financing. The results of our study show that acquirers’ accounting information quality directly affects debt financing costs, and also intensifies the negative relationship between MARs and debt cost. These findings provide valuable insights for managers in acquiring firms, because the results that by improving the quality of their accounting information, acquirers can lower the cost of debt financing. More specifically, to reduce debt financing costs, acquiring firms should actively improve their financial reporting quality rather than conduct earnings manipulation, and should decrease information risk and financial friction. Acquiring firms conducting MAR transactions also need to improve the quality of their accounting information and further decrease information asymmetry in capital markets if they desire lower-cost debt financing.