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The Impact of Crisis, Accounting Conservatism and Debt Resources Allocation |
ZENG Aimin,LENG Hongyu,WEI Zhihua |
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Abstract Whether accounting conservatism should be retained as a characteristic of accounting information is a long disputed theoretical topic, To shed some lights on it, this paper conducts empirical studies on how accounting conservatism affects the allocation of debt resources when impacted by a substantial negative crisis event, taking the 2008 global financial crisis as an example. The results show that accounting conservatism can not only guide the direction of, but also optimize the efficiency of the allocation of debt resources significantly during financial crisis period. compared with the pre-crisis period. Moreover, taking the special property institution of China into considerations, further studies demonstrate that the effects of accounting conservatism on private enterprises are more pronounced than on state-owned companies. This study enriches the debt covenants theory on accounting conservatism both from the perspective of allocation direction and allocation efficiency of debt resources, which strongly support the necessity of viewing the accounting conservatism as a characteristic of accounting information., It also provides useful guidance to decision-making of debt resources allocation for banks and other financial institutions.
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Received: 29 September 2016
Published: 15 December 2016
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Corresponding Authors:
ZENG Aimin
E-mail: chasingsun@126.com
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