全球智库信息集成服务系统(G2TT): DP16844 Creditor Rights, Implicit Covenants, and the Quality of Accounting Information

G2TT

来源类型	Discussion paper
规范类型	论文
来源ID	DP16844
	DP16844 Creditor Rights, Implicit Covenants, and the Quality of Accounting Information
	Assaf Hamdani; Yevgeny Mugerman; Ruth Rooz; YIshay Yafeh
发表日期	2021-12-27
出版年	2021
语种	英语
摘要	We study a 2013 court decision that enhanced creditor control rights in Israeli firms by allowing them to force companies into bankruptcy. We find that the market expected the court ruling to benefit creditors: bond (equity) prices of companies affected by the new rule responded positively (negatively). We attribute this to the ability of creditors to initiate bankruptcy procedures earlier than in the period before the court ruling. We also observe a pronounced increase in the reported net worth of the firms affected by the new rule. We find evidence suggesting that some firms affected by the new rule increased their net worth by raising more equity. We also find, however, that firms changed their accounting practices, as reflected by an increase in long-term discretionary accruals and a decrease in accounting conservatism. As a result of these accounting changes, we document a decline in the informativeness of the treated firms’ financial reports. We conclude that the benefits from creditor control rights may be mitigated by unintended consequences in the form of increased incentives for firms to adopt aggressive accounting practices and, as a result, a reduction in the informativeness of firms’ financial reporting.
主题	Financial Economics
关键词	Creditor rights Covenants Financial distress Bankruptcy Accounting conservatism Accruals Informativeness
URL	https://cepr.org/publications/dp16844
来源智库	Centre for Economic Policy Research (United Kingdom)
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/545767
推荐引用方式 GB/T 7714	Assaf Hamdani,Yevgeny Mugerman,Ruth Rooz,et al. DP16844 Creditor Rights, Implicit Covenants, and the Quality of Accounting Information. 2021.