Accounting information quality and guaranteed loans: evidence from Japanese SMEs

Hyonok Kim () and Yukihiro Yasuda ()
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Hyonok Kim: Tokyo Keizai University
Yukihiro Yasuda: Hitotsubashi University

Small Business Economics, 2019, vol. 53, issue 4, No 11, 1033-1050

Abstract: Abstract We empirically investigate the effects of accounting information quality, as measured by accruals quality, on the use of government guaranteed loans, which we regard as a form of transaction lending. We find that higher accruals quality is associated with higher usage rates of government guaranteed loans, but not with those of nonguaranteed loans, which we consider to constitute relationship lending within the Japanese context. We also find that higher accruals quality is not related to the interest rate for guaranteed loans, but rather is associated with a lower interest rate for nonguaranteed loans. These results indicate that the relevant accounting information is effectively used in screening processes for small- and medium-sized enterprises (SMEs), but that effectiveness varies, depending on the particular lending technology employed.

Keywords: Accruals quality; Guaranteed loans; Transaction lending; Relationship lending; Interest rates (search for similar items in EconPapers)
JEL-codes: G21 G31 G32 L26 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11187-018-0106-5

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