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Financial statement comparability and corporate debt maturity

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  • Do, Trung K.

Abstract

This paper examines the relation between financial statement comparability and corporate debt maturity. We provide robust evidence that comparability has a negative effect on short-maturity debt. Consistent with the notion that comparability of financial statements plays an important role in aligning incentives within the firm, the inverse effect is more pronounced in cases where information asymmetry problems are more severe. Overall, our findings indicate that financial statement comparability can substitute for the use of short-term debt by serving as a corporate governance mechanism.

Suggested Citation

  • Do, Trung K., 2021. "Financial statement comparability and corporate debt maturity," Finance Research Letters, Elsevier, vol. 40(C).
    • Handle: RePEc:eee:finlet:v:40:y:2021:i:c:s1544612320303020
    DOI: 10.1016/j.frl.2020.101693
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    More about this item

    Keywords

    Financial statement comparability; Debt maturity; Agency costs; Information asymmetry; JEL G30; G32 M41;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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