Consequences of GAAP disclosure regulation: Evidence from municipal debt issues

• 成果类型: Article
• 署名作者: Baber, William R.; Gore, Angela K.
• 署名单位: Georgetown University; George Washington University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2008.83.3.565
• 发表日期: 2008
• 页码: 565-591
• 关键词: Information asymmetry; CORPORATE DISCLOSURE; reporting practices; capital-markets; determinants; association; COMPETITION; QUALITY; IMPACT; COSTS

摘要

We compare characteristics; of municipal debt issues in states that mandate GAAP for municipalities with issues in states that impose no annual financial disclosure requirements. Cross-sectional comparisons indicate that the use of public (versus private) debt is greater, and municipal debt costs are 14 to 25 basis points lower, in states where GAAP is mandated. Moreover, municipalities in states that impose the GAAP requirement realize lower, debt costs following the effective date of the regulation. These results suggest that GAAP requirements reduce municipal borrowing costs. More generally, the evidence indicates that financial reporting regulation reduces contracting costs between borrowers and lenders.