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Financial reporting quality, debt maturity and investment efficiency

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  • Juan Pedro Sánchez Ballesta

    ()
    (Facultad de Economía y Empresa)

  • M. Fuensanta Cutillas Gomariz

    ()
    (Facultad de Economía y Empresa)

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    Abstract

    This study, conducted with a sample of Spanish listed companies during the period 1998-2008,examines the role of financial reporting quality and debt maturity in investment efficiency.The results show that financial reporting quality mitigates the overinvestment problem.Likewise, lower debt maturity can improve investment efficiency, reducing bothoverinvestment and underinvestment problems. We further find that financial reportingquality and debt maturity are mechanisms with some degree of substitution in enhancinginvestment efficiency: firms with lower (higher) use of short-term debt, exhibit higher (lower)financial reporting quality effect on investment efficiency. Este trabajo analiza la influencia de la calidad de la información financiera y la madurez de ladeuda en la eficiencia de la inversión para un conjunto de empresas cotizadas españolas en elperiodo 1998-2008. Los resultados muestran que la calidad de la información financierareduce el problema de sobreinversión, mientras que el plazo de la deuda solventa losproblemas tanto de sobreinversión como de infrainversión. Además, ambos mecanismosmuestran cierto grado de sustitución en la mejora de la eficiencia de la inversión: las empresascon menor (mayor) utilización de deuda a corto plazo, muestran mayor (menor) efecto de lacalidad de la información financiera sobre la eficiencia de la inversión.

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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2012-07.pdf
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    Bibliographic Info

    Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 2012-07.

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    Length: 32 pages
    Date of creation: Oct 2012
    Date of revision:
    Publication status: Published by Ivie
    Handle: RePEc:ivi:wpasec:2012-07

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    Keywords: eficiencia de la inversión; sobreinversión; infrainversión; calidad de la información financiera; madurez de la deuda. investment efficiency; overinvestment; underinvestment; financial reporting;

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    References

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