Accounting Information Comparability And Debt Financing

High-quality accounting information helps to reduce the information asymmetry between banks and enter:prises,improve enterprises' financing ability and increase debt financing scale,playing an important role in the formulation and implementation of debt contracts.Comparability is an important qualitative characteristic of accounting information.For information users,more comparable accounting information means lower information usage cost and risk together with higher decision-making usefulness.Comparability enables creditors such as banks to gain a deeper understanding of accounting figures and the essence of economic business,thereby improving investment efficiency.However,there is a few literature on the relationship between accounting information comparability and corporate debt financing.This paper takes China's A-share listed companies from 2011 to 2017 as samples and calculates the accounting information comparability with reference to De Franco et al.(2011).Firstly,this paper empirically tests the relationship between accounting information comparability and corporate debt financing and finds that comparability is significantly positively correlated with corporate debt financing scale,that is,higher comparability helps enterprises to increase the debt financing scale.Furthermore,this paper empirically tests whether the effect of accounting information comparability on corporate debt financing is different in enterprises of different property rights and different scales.It is found that the positive effect of comparability on corporate debt financing is stronger in non-state-owned enterprises and small enterprises.This indicates that comparability reduces the information asymmetry and changes the asymmetric position between different types of entities in debt financing.Comparability weakens the signal effect of enterprises' property right and scale on the risk of default and solvency,thus improving the usefulness of accounting information in debt contracts.China's institutional environment has its own particularities and each region has great differences in terms of marketization level,legal system construction,investor protection and so on.Enterprises endogenize from specific institutional environment,so enterprises' debt financing behavior and the usefulness of accounting information in debt contracts will be affected by institutional environment.Therefore,this paper further explores the impact of institutional environment on the effectiveness of accounting information comparability.It is found that in non-state-owned sample,the improvement of institutional environment has a significantly positive impact on the effectiveness of accounting information comparability,but not significantly in the whole sample and state-owned sample.Therefore,optimizing the institutional environment and improving the effect of accounting information quality is of great significance for alleviating the problems of bank credit discrimination and financing difficulties faced by non-state-owned enterprises in China.Finally,this paper explores the impact of the enterprise ultimate control on the effectiveness of accounting information comparability.It is found that comparability has a stronger effect on corporate debt financing in enterprises with lower ultimate control.It shows that banks can identify the higher risk of encroachment on their interests in enterprises with higher ultimate control,thereby banks reduce the credit scale and the usefulness of accounting information.Further regression results show that the weakening effect of the higher ultimate control on the effectiveness of comparability is only significant for the sample with poor institutional environment and not significant for the sample with better institutional environment.This indicates that the improvement of the institutional environment offsets the negative impact of higher ultimate control on corporate debt financing and makes the accounting information comparability more effective.In summary,this paper studies the correlation between accounting information comparability and corporate debt financing and examines the diff-erent effects of accounting information comparability on corporate debt financing from the perspectives of enterprise scale,property rights,institutional environment and ultimate control.It enriches the study of the economic consequences of accounting information comparability and provides a reference and empirical evidence for optimizing the efficiency of credit allocation.