The roll of accounting in debt contract renegotiations : evidence from positive shocks
Name
913786020-MIT.pdf
Description
Full printable version
Size
3.86 MB
Format
Adobe PDF
Checksum (MD5)
d7ca0cbe2af23768f262d5c8a3409266
Author(s)
Zheng, Kexin, Ph. D. Massachusetts Institute of Technology
Advisor(s)
Joseph Weber.
Date Issued
2014
Publisher
Massachusetts Institute of Technology
Abstract
Using a hand-collected sample of private debt contracts between U.S. publicly traded firms and financial institutions, I examine the role of accounting in the renegotiation of debt contracts following a positive shock to the borrower's credit quality. I find that, following a positive shock to their credit quality, firms with more timely reporting of good news are more likely to renegotiate their loan contracts and they do so sooner than firms with less timely good news reporting. Further, these effects are more pronounced for firms whose positive shocks can be more credibly communicated through financial reporting. My paper contributes to the literature on the role of accounting information in debt contract renegotiations.
Description
Thesis: Ph. D., Massachusetts Institute of Technology, Sloan School of Management, 2014.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 39-44).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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