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

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  • 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 of Department of Management, Strategy and Innovation, Leuven 548316, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    • Handle: RePEc:ete:msiper:548316
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    Cited by:

    1. Mertzanis, Charilaos & Marashdeh, Hazem & Houcine, Asma, 2024. "Do financing constraints affect the financial integrity of firms?," International Review of Economics & Finance, Elsevier, vol. 90(C), pages 220-240.
    2. Bertrand, Jérémie & de Brebisson, Hélène & Burietz, Aurore, 2021. "Why choosing IFRS? Benefits of voluntary adoption by European private companies," International Review of Law and Economics, Elsevier, vol. 65(C).
    3. Martin Glaum, 2020. "Financial Reporting in Non-listed Family Firms: Insights from Interviews with CFOs," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(2), pages 225-270, April.
    4. Kimani, Danson & Adams, Kweku & Attah-Boakye, Rexford & Ullah, Subhan & Frecknall-Hughes, Jane & Kim, Ja, 2020. "Blockchain, business and the fourth industrial revolution: Whence, whither, wherefore and how?," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    5. Miriam Goetz, 2024. "Multinational Lending Retrenchment after the Global Financial Crisis: The Impact of Policy Interventions," Journal of Financial Services Research, Springer;Western Finance Association, vol. 66(1), pages 51-75, August.
    6. Jérémie Bertrand & Paul-Olivier Klein & Fotios Pasiouras, 2024. "National culture of secrecy and firms’ access to credit," Post-Print hal-04691594, HAL.
    7. Damiano Montani & Daniele Gervasio & Andrea Pulcini & Camilla Marchesi, 2021. "Accounting Harmonisation through IAS/IFRS and Internationalisation: Evidence from FDIs and Cross-Border M&A," Accounting and Finance Research, Sciedu Press, vol. 10(3), pages 1-44, August.
    8. Snježana Deno & Thomas Loy & Carsten Homburg, 2020. "What Happens If Private Accounting Information Becomes Public? Small Firms’ Access to Bank Debt," Entrepreneurship Theory and Practice, , vol. 44(6), pages 1091-1111, November.

    More about this item

    Keywords

    International Financial Reporting Standards; Private Firms; Debt; Enforcement; ADHDynamisch;
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