How Does Financial Reporting Regulation Affect Firms' Banking?

• 成果类型: Article
• 署名作者: Breuer, Matthias; Hombach, Katharina; Mueller, Maximilian A.
• 署名单位: University of Chicago; Frankfurt School Finance & Management; WHU - Otto Beisheim School of Management
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx123
• 发表日期: 2018
• 页码: 1265
• 关键词: regression discontinuity designs; lending relationships; information acquisition; PROPRIETARY INFORMATION; Market competition; FUTURE-RESEARCH; credit markets; disclosure; debt; distance

摘要

We examine the effects of financial reporting regulation on firms' banking. Exploiting discontinuous public disclosure and auditing requirements assigned to otherwise similar small and medium-sized private firms, we document that financial reporting regulation reduces firms' reliance on concentrated and local bank relationships and increases banks' reliance on firms' financial reporting, consistent with a shift in firms' banking from relationship toward transactional approaches. Our evidence suggests that financial reporting regulation substitutes for banks' information production role by burdening firms with the disclosure and auditing of their financial statements, consistent with institutional complementarities between reporting and banking systems.