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Accruals Quality and Debt Maturity Structure

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  • PEDRO J. GARCÍA‐TERUEL
  • PEDRO MARTÍNEZ‐SOLANO
  • JUAN P. SÁNCHEZ‐BALLESTA

Abstract

In this paper we use panel data and GMM estimation to examine the effect of accounting quality on debt maturity structure in a bank‐based financial system and show that, even after controlling for unobservable heterogeneity, endogeneity, variables reflecting operating volatility and the cost of debt, firms with poor accounting quality face a shorter debt term than firms with higher accounting quality. This association between accounting quality and debt maturity is consistent with accounting quality as a means of reducing information asymmetry problems and improving the monitoring of managers.

Suggested Citation

  • Pedro J. García‐Teruel & Pedro Martínez‐Solano & Juan P. Sánchez‐Ballesta, 2010. "Accruals Quality and Debt Maturity Structure," Abacus, Accounting Foundation, University of Sydney, vol. 46(2), pages 188-210, June.
  • Handle: RePEc:bla:abacus:v:46:y:2010:i:2:p:188-210
    DOI: 10.1111/j.1467-6281.2010.00312.x
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    Cited by:

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    2. Cutillas Gomariz, Mª Fuensanta & Sánchez Ballesta, Juan Pedro, 2014. "Financial reporting quality, debt maturity and investment efficiency," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 494-506.

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