Toward a general equilibrium theory of financial reporting

• 成果类型: Article
• 署名作者: Bertomeu, Jeremy; Cheynel, Edwige
• 署名单位: Washington University (WUSTL)
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12861
• 发表日期: 2023
• 页码: 1521-1544
• 关键词: disclosure; conservatism; cost; INFORMATION; EFFICIENCY

摘要

We present a model in which investment capacity is reallocated in response to aggregate shocks and examine the resulting general equilibrium effects. The theory predicts a positive association between aggregate liquidity shocks, cost of capital, and conservative accounting. When capital becomes scarce, the accounting system is designed to preserve collateral, which depletes the supply of traded capital and leads to a higher cost of capital. The economy may accelerate small shocks with large (discontinuous) readjustments in financial reporting policies, cost of capital, and investment activity. We show that accounting policies set by firms to increase their market value may imply multiple equilibria, with self-fulfilling inefficient equilibria exhibiting excessive collateral requirements and reduced aggregate investment.