Discussion of Borrower private information covenants and loan contract monitoring

• 成果类型: Article
• 署名作者: Nikolaev, Valeri V.
• 署名单位: University of Chicago
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.08.002
• 发表日期: 2017
• 关键词: financial-reporting frequency; CORPORATE DISCLOSURE; asymmetry; voluntary; CHOICE; cost

摘要

Carrizosa and Ryan (2017) explore the use of private information covenants, which contractually oblige borrowers to disclose projected and intra-quarter financial statements. The authors provide evidence that creditors acquire private information about borrowers via these covenants. This facilitates the monitoring process, subject to a cost-benefit tradeoff. I discuss how the study fits into the literature and contend that the costs associated with information covenants are less clear and have yet to be established. I discuss complementary information mechanisms and raise several research design issues. I also argue that the study sheds light on an open question in the disclosure literature. (C) 2017 Elsevier B.V. All rights reserved.