The role of bank monitoring in borrowers׳ discretionary disclosure: Evidence from covenant violations

This study uses covenant violations to provide evidence on how firms make disclosure decisions in the presence of enhanced bank monitoring. Using a regression discontinuity design, I find that firms reduce disclosure following covenant violations. A series of analyses suggest that part of this decline in disclosure reflects a delegation of monitoring to banks by shareholders who consequently demand less disclosure.

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Year of publication:	2014
Authors:	Vashishtha, Rahul
Published in:	Journal of Accounting and Economics. - Elsevier, ISSN 0165-4101. - Vol. 57.2014, 2, p. 176-195
Publisher:	Elsevier
Subject:	Disclosure \| Banks \| Corporate governance \| Covenant violation \| Control rights

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Type of publication:	Article
Classification:	M40 - Accounting and Auditing. General ; G21 - Banks; Other Depository Institutions; Mortgages ; G32 - Financing Policy; Capital and Ownership Structure ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011043069