Supply and Demand of Accounting Information: The Case of Bank Financing in Russia
WHU - Otto Beisheim School of Management
University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control
The article analyzes uses of accounting information in Russia. We assess the reporting behavior in the lending process for a sample of Russian companies in the years 1999 to 2004. We predict that Russian companies manage earnings to avoid losses before a credit was granted to obtain bank financing. Once the credit was granted companies are predicted to manage earnings because of the bank's monitoring activities. By means of univariate and multivariate analysis we are able to attribute the discontinuity around a zero target in the earnings distribution with firms' response to the banks' assessment of accounting performance. This implies that financing considerations affect reporting incentives of Russian companies.
Number of Pages in PDF File: 35
Keywords: earnings management, reporting incentives, bank financing, transition economies
JEL Classification: G21, M41, P21working papers series
Date posted: July 27, 2006
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