The Effect of Information Opacity and Accounting Irregularities on Personal Lending Relationships: Evidence from Lender and Manager Co-Migration

• 成果类型: Article
• 署名作者: Khan, Urooj; Li, Xinlei; Williams, Christopher D.; Wittenberg-Moerman, Regina
• 署名单位: Columbia University; Hong Kong University of Science & Technology; University of Michigan System; University of Michigan; University of Southern California
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-52287
• 发表日期: 2019
• 页码: 303-344
• 关键词: internal control; private information; credit; reputation; earnings; distance; IMPACT; style; CONSEQUENCES; determinants

摘要

We examine how personal lending relationships between lenders and managers are affected by information and accounting environments of borrowing firms. We address this question by exploring whether, following managerial turnover, lenders migrate with the manager from the firm where a relationship developed (origin firm) to the manager's new firm (destination firm). We find that the opacity of the external information environment of the destination firm significantly increases the probability of lenders' co-migration, while accounting irregularities at both the destination and origin firms decrease it. We also show that co-migration is affected by a lender's monitoring efficiency. A lender's monitoring efficiency increases its co-migration probability when a manager moves to an opaque firm, but not when she moves to a transparent one. When the destination or origin firm experiences accounting irregularities, even lenders with strong monitoring capabilities are mostly reluctant to continue their relationship with a migrating manager.