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This study examines whether firms with private loan contracts that contain debt covenants based on earnings before interest, taxes, depreciation and amortization (EBITDA) are more likely to misclassify core expenses as special items (i.e., classification shift). Misclassifying core expenses as...
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employ a regression discontinuity design to identify the effect of bank interventions on their borrowers' trade credit. The … results show that trade credit experiences a substantial decline when banks intervene in the borrowing firm following covenant … contracts when they rely more on trade credit or trade creditors …
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We examine whether initial loan sales in the secondary loan market relate to borrowing firms' accounting conservatism. We find that borrowing firms exhibit a significant decline in accounting conservatism after the initial loan sales. We show that the decline in borrower conservatism is more...
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