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International financial reporting standards and private firms’ access to bank loans

Author

Listed:
  • Benjamin Balsmeier
  • Steven Vanhaverbeke

Abstract

Prior research has focused on publicly listed firms when examining the economic consequences of adopting International Financial Reporting Standards (IFRS). This study extends the literature by examining the ability of private firms to attract bank loans through the use of IFRS. Based on firm-level data from 25 countries, we show that private firms that voluntarily use IFRS are associated with a higher propensity to attract debt from foreign banks. We find no such association when examining their relationships with domestic banks. Supplementary analyses show that the results are mainly driven by private firms operating in countries with strong regulatory enforcement. The findings suggest that, conditional on adequate enforcement, the use of IFRS provides useful information for foreign non-relationship banks.

Suggested Citation

  • Benjamin Balsmeier & Steven Vanhaverbeke, 2016. "International financial reporting standards and private firms’ access to bank loans," Working Papers Department of Accountancy, Finance and Insurance (AFI), Leuven 548316, KU Leuven, Faculty of Economics and Business (FEB), Department of Accountancy, Finance and Insurance (AFI), Leuven.
    • Handle: RePEc:ete:afiper:548316
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