Gao, Janet
[VerfasserIn]
;
Liang, Chuchu
[Sonstige Person, Familie und Körperschaft];
Merkley, Kenneth J.
[Sonstige Person, Familie und Körperschaft];
Pacelli, Joseph
[Sonstige Person, Familie und Körperschaft]
Erschienen in:Kelley School of Business Research Paper ; No. 16-35
Umfang:
1 Online-Ressource (53 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2758206
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 2018 erstellt
Beschreibung:
This study examines the effects of lenders' recent default experience on borrowers' timely lossrecognition. We exploit a unique empirical setting that examines defaults occurring in lenders'loan portfolios that are unrelated to the firms of interest. We find that borrowers increase timelyloss recognition following lenders' default experiences. Our results vary predictably based on thecosts and benefits associated with lenders changing their monitoring behavior. We verify thatincreases in timely loss recognition connected to lenders' recent default experiences facilitategreater creditor control, by tightening covenants and increasing the likelihood of violations.Overall, our study suggests that lender default experiences are informative events that havespillover effects for firms' financial reporting choices