Supply and Demand of Accounting Information: The Case of Bank Financing in Russia

35 Pages Posted: 27 Jul 2006

See all articles by Igor Goncharov

Igor Goncharov

Lancaster University - Department of Accounting and Finance

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control

Date Written: July 2006

Abstract

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.

Keywords: earnings management, reporting incentives, bank financing, transition economies

JEL Classification: G21, M41, P21

Suggested Citation

Goncharov, Igor and Zimmermann, Jochen, Supply and Demand of Accounting Information: The Case of Bank Financing in Russia (July 2006). Available at SSRN: https://ssrn.com/abstract=918821 or http://dx.doi.org/10.2139/ssrn.918821

Igor Goncharov (Contact Author)

Lancaster University - Department of Accounting and Finance ( email )

The Management School
Lancaster LA1 4YX
United Kingdom

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics ( email )

Hochschulring 4
Germany
+49 421 218 9121 (Phone)

University of Bremen - Chair of Accounting and Control ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany
+49 421 218-9119 (Phone)

HOME PAGE: http://www.controlling.uni-bremen.de

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