Does Debt Financing Affect the Sustainability of Transparent Accounting Information?
Abstract
1. Introduction
2. Review of Previous Studies and Hypotheses
2.1. Prior Research Related to Debt Financing
2.2. Research Related to Matching and Establishment of Hypotheses
3. Research Methodology
3.1. Research Model
- β0 constant term
- REV total revenue (=(sales + non-operating revenue)/average total assets))
- EXP total expense (=(cost of goods sold + selling and administrative expenses + non-operating expenses)/average total assets))
- residual term
- LR private debt ratio (private debt/(private debt+public debt)), private debt means borrowing and public debt means corporate bond.
- YD year dummy.
- IND industry dummy. For other variables, see Equation (1).
3.2. Sample Selection
- (1)
- A company that can continuously measure financial data, stock price data, andaccounting firms from 2002 to 2019 in the KIS-Value database of NICE.
- (2)
- Modify opinion and Impairment of Capital are excluded.
4. Empirical Analysis
4.1. Descriptive Statistics and Correlation Analysis
4.2. Results
4.3. Robustness Test
- MAT_DT additional matching level1(β2 given in Equation (1))
- LEV debt ratio (=total liabilities/total assets)
- SIZE size (= ln (total assets))
- BIG accounting firm (= 1 if BIG accounting firm, 0 otherwise)
- SMO earnings smoothing (=standard deviation of net income for 5 years/standard deviation of cash flow from operating activities for 5 years × (−1))
- VOL standard deviation of stock returns (=standard deviation of annual stock returns). For other variables, see Equation (1).
- REV total revenue (= (sales + non-operating revenue)/average total assets))
- EXP total expense (= (cost of goods sold + selling and administrative expenses + non-operating expenses)/average total assets))
- MAT_P additional matching level2 (Adj.R2(MAT_P) in Equation (4))
- LR private debt ratio (private debt/(private debt + public debt)), private debt means borrowing and public debt means corporate bond.
- LEV debt ratio (=total liabilities/total assets)
- SIZE size (= ln (total assets))
- BIG accounting firm (= 1 if BIG accounting firm, 0 otherwise)
- SMO earnings smoothing ((=standard deviation of net income for 5 years/standard deviation of cash flow from operating activities for 5 years × (−1))
- VOL standard deviation of stock returns (= standard deviation of annual stock returns)
- YD year dummy
- IND industry dummy. For other variables, see Equation (1).
5. Discussion and Conclusions
Author Contributions
Funding
Informed Consent Statement
Conflicts of Interest
References
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Variables | Mean | Stdev | Min | 25% | Median | 75% | Max |
---|---|---|---|---|---|---|---|
REV | 0.9889 | 0.5293 | 0.0082 | 0.6546 | 0.8975 | 1.2081 | 5.0935 |
EXPt−1 | 0.9872 | 0.5373 | 0.0046 | 0.6502 | 0.8828 | 1.1947 | 6.2847 |
EXPt | 0.9660 | 0.5156 | 0.0046 | 0.6396 | 0.8699 | 1.1764 | 5.0625 |
EXPt+1 | 0.9467 | 0.5028 | 0.0046 | 0.6268 | 0.8603 | 1.1633 | 4.3964 |
LR | 0.8629 | 0.2666 | 0.0000 | 0.8830 | 1.0000 | 1.0000 | 1.0000 |
Variables | REV | EXPt−1 | EXPt | EXPt+1 |
---|---|---|---|---|
EXPt−1 | 0.9403 *** | |||
EXPt | 0.9855 *** | 0.9450 *** | ||
EXPt+1 | 0.9374 *** | 0.8916 *** | 0.9483 *** | |
LR | 0.0616 *** | 0.0643 *** | 0.0735 *** | 0.0751 *** |
Variables | Model 1 | Model 2 | Model 3 | |||
---|---|---|---|---|---|---|
Coeff. | t-stat. | Coeff. | t-stat. | Coeff. | t-stat. | |
Inter. | 0.0069 | 2.08 ** | 0.0545 | 5.11 *** | 0.0756 | 6.54 *** |
EXPt−1 | 0.0840 | 9.64 *** | 0.0394 | 1.07 | 0.0354 | 0.97 |
EXPt | 0.8983 | 69.41 *** | 1.0340 | 18.80 *** | 1.0333 | 19.03 *** |
EXPt+1 | 0.0332 | 3.46 *** | −0.0938 | −2.27 ** | −0.0907 | −2.22 ** |
LRt | −0.0557 | −4.73 *** | −0.0703 | −5.76 *** | ||
LRt × EXPt−1 | 0.0491 | 1.23 | 0.0534 | 1.35 | ||
LRt × EXPt | −0.1487 | −2.51 ** | −0.1465 | −2.51 ** | ||
LRt × EXPt+1 | 0.1411 | 3.18 *** | 0.1387 | 3.17 *** | ||
YD | Not-included | Not-included | Included | |||
IND | Not-included | Not-included | Included | |||
F-value | 38,863.78 *** | 16,801.82 *** | 4679.16*** | |||
Adj.R2 | 0.9721 | 0.9724 | 0.9733 |
Variables [Prais–Winsten Test] | Model 1 | Model 2 | ||
---|---|---|---|---|
Coeff. | t-stat. | Coeff. | t-stat. | |
Inter. | 0.0652 | 4.30 *** | 0.0843 | 5.30 *** |
EXPt−1 | 0.0335 | 1.05 | 0.0346 | 1.08 |
EXPt | 0.9731 | 23.35 *** | 0.9780 | 23.42 *** |
EXPt+1 | −0.0258 | −0.70 | −0.0334 | −0.91 |
LRt | −0.0721 | −4.34 *** | −0.0827 | −4.89 *** |
LRt × EXPt−1 | 0.0560 | 1.62 | 0.0558 | 1.62 |
LRt × EXPt | −0.0915 | −2.03 ** | −0.0966 | −2.14 ** |
LRt × EXPt+1 | 0.0792 | 2.00 ** | 0.0875 | 2.22 ** |
YD | Not-included | Included | ||
IND | Not-included | Included | ||
F-value | 9063.67 *** | 2532.32 *** | ||
Adj.R2 | 0.9499 | 0.9517 | ||
Variables [Newey–West Test] | Model 3 | Model 4 | ||
Coeff. | t-stat. | Coeff. | t-stat. | |
Inter. | 0.0545 | 6.22 *** | 0.0756 | 7.01 *** |
EXPt−1 | 0.0394 | 0.70 | 0.0354 | 0.63 |
EXPt | 1.0340 | 15.42 *** | 1.0333 | 15.75 *** |
EXPt+1 | −0.0938 | −2.30 ** | −0.0907 | −2.32 ** |
LRt | −0.0557 | −5.28 *** | −0.0703 | −5.80 *** |
LRt × EXPt−1 | 0.0491 | 0.71 | 0.0534 | 0.78 |
LRt × EXPt | −0.1487 | −1.68 * | −0.1465 | −1.70 * |
LRt × EXPt+1 | 0.1411 | 2.56 ** | 0.1387 | 2.61 *** |
YD | Not-included | Included | ||
IND | Not-included | Included | ||
F-value | 15,761.74 *** | 4905.74 *** |
Variables | Coeff. | t-stat. |
---|---|---|
Inter. | 1.5010 | 12.69 *** |
LR | −0.0507 | −2.40 ** |
LEV | −0.0697 | −3.16 *** |
SIZE | −0.0057 | −1.50 |
BIG | −0.0014 | −0.13 |
SMO | 0.0126 | 5.95 *** |
VOLt | −0.4659 | −2.88 *** |
YD | Included | |
IND | Included | |
F-value | 7.73 *** | |
Adj.R2 | 0.0519 |
Variables | Coeff. | t-stat. |
---|---|---|
Inter. | 1.0066 | 11.82 *** |
LR | −0.0276 | −1.82 * |
LEV | −0.0373 | −2.35 *** |
SIZE | −0.0027 | −1.00 |
BIG | 0.0199 | 2.57 *** |
SMO | 0.0223 | 14.26 *** |
VOLt | −0.5234 | −4.49 *** |
YD | Included | |
IND | Included | |
F-value | 15.88 *** | |
Adj.R2 | 0.1079 |
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Jung, H.-U.; Mun, T.-H.; Roh, T. Does Debt Financing Affect the Sustainability of Transparent Accounting Information? Sustainability 2021, 13, 4052. https://doi.org/10.3390/su13074052
Jung H-U, Mun T-H, Roh T. Does Debt Financing Affect the Sustainability of Transparent Accounting Information? Sustainability. 2021; 13(7):4052. https://doi.org/10.3390/su13074052
Chicago/Turabian StyleJung, Hyun-Uk, Tae-Hyoung Mun, and Taewoo Roh. 2021. "Does Debt Financing Affect the Sustainability of Transparent Accounting Information?" Sustainability 13, no. 7: 4052. https://doi.org/10.3390/su13074052
APA StyleJung, H.-U., Mun, T.-H., & Roh, T. (2021). Does Debt Financing Affect the Sustainability of Transparent Accounting Information? Sustainability, 13(7), 4052. https://doi.org/10.3390/su13074052