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What Happens If Private Accounting Information Becomes Public? The Effect of Small Firms' Mandatory Public Disclosure on Their Access to Bank Debt

Title data

Deno, Snjezana ; Loy, Thomas ; Homburg, Carsten:
What Happens If Private Accounting Information Becomes Public? The Effect of Small Firms' Mandatory Public Disclosure on Their Access to Bank Debt.
Köln ; Bayreuth , 2018 . - 45 p.

Official URL: Volltext

Abstract in another language

This paper exhibits the effect of private accounting information becoming public on small private firms’ access to bank debt. Both, proprietary cost of disclosure as well as relationship banking seem to historically have contributed to German private firms not voluntarily disclosing their financial statements. Employing a regulatory change, which increased enforcement and initially established fines for firms that do not publicly disclose their financial statements, we hypothesize and find that small private firms’ access to bank debt significantly increases. Results of this quasi-natural experiment, and our novel dataset in a non-voluntary private firm setting, contribute to the discussion revolving around the nexus between private and public information in debt contracting. As we focus exclusively on small private firms, our findings with respect to disclosure are unbiased by confounding effects of mandatory financial statement audits.

Further data

Item Type: Working paper, discussion paper
Keywords: mandatory public disclosure; access to bank debt; private firms
Subject classification: JEL Classification: D82, G14, M41
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Junior Professorship Auditing > Junior Professorship Auditing - Juniorprof. Dr. Thomas Loy
Profile Fields > Emerging Fields > Governance and Responsibility
Research Institutions > Research Units > Forschungsstelle für Unternehmens- und Kapitalmarktrecht sowie Unternehmenssteuerrecht - Companies, Capital Markets and Taxes - CoCapT
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Junior Professorship Auditing
Profile Fields
Profile Fields > Emerging Fields
Research Institutions
Research Institutions > Research Units
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 08 Nov 2017 10:17
Last Modified: 04 Apr 2019 05:40
URI: https://eref.uni-bayreuth.de/id/eprint/40355