 Reporting quality and financial leverage: Are qualitative characteristics or earnings quality more important? Evidence from an emerging bank-based economyLy Thi Hai Tran Research in International Business and Finance, 2022, vol. 60, issue C Abstract: Drawing on pecking-order theory and agency theory, this study investigates whether financial leverage is affected by financial reporting quality. Financial reporting quality is measured by employing the outcome of the Vietnam Annual Report Awards and earnings quality. I find that firms with higher reporting quality have a lower degree of information asymmetry and lower debt ratios, consistent with pecking-order theory and agency theory. The results also indicate that two aspects of reporting quality, qualitative characteristics and earnings quality, are not substitutes but complementary in explaining the debt ratio. In addition, I find that qualitative characteristics play a more significant role in reducing information asymmetry than earnings quality. Keywords: Financial leverage; Information asymmetry; Reporting quality; Bid-ask spread; Vietnam (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:60:y:2022:i:c:s0275531921001999 DOI: 10.1016/j.ribaf.2021.101578 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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