2026-09-19T05:49:50Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/337482022-01-13T07:54:52Zcom_1721.1_7582com_1721.1_7581col_1721.1_131022
S.P. Kothari.
Zhang, Jieying, Ph. D. Massachusetts Institute of Technology
Sloan School of Management.
Sloan School of Management
2006-07-31T15:30:12Z
2006-07-31T15:30:12Z
2005
2005
http://hdl.handle.net/1721.1/33748
65192813
Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2005.
Includes bibliographical references (leaves 55-57).
In this paper, I examine the ex post and ex ante benefits of conservatism to lenders and borrowers in the debt contracting process. First, I argue that conservatism benefits lenders ex post through a timely signal of default risk in the form of accelerated covenant violations by more conservative borrowers. I present evidence that the likelihood of a covenant violation following a negative shock increases in borrower conservatism. Second, I argue that conservatism benefits borrowers ex ante through lower initial interest rates. I provide both in- sample and out-of-sample evidence that lenders offer lower interest rates to more conservative borrowers. The result is robust to controlling for a series of other earnings attributes.
by Jieying Zhang.
Ph.D.
80 leaves
4489481 bytes
4492763 bytes
application/pdf
application/pdf
eng
Massachusetts Institute of Technology
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http://dspace.mit.edu/handle/1721.1/7582
Sloan School of Management.
The contracting benefits of accounting conservatism to lenders and borrowers
Thesis
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