We examine whether firms engage in classification shifting to meet performance targets during mergers and restructuring … extends the research on incentives for classification shifting and has implications for regulators to strengthen the …

difference-in-differences model and studies how credit availability affects classification shifting from the perspective of … formal debt contract formation. We find that high-risk firms’ classification shifting degree is higher after the bank lending … classification shifting is stronger when the level of financing constraints is higher, the diversity of financing channels is lower …