Effects of Corporate Governance on the Relationship between Accounting Quality and Trade Credit: Evidence from Japan

Masahiro Enomoto

No DP2018-12, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This study investigates the effects of shareholdings on the relationship between accounting quality and trade credit in Japan. It focuses on cross-sectional and stable shareholdings, which are well-known features of Japanese corporate governance, as a private information-sharing system. The relationships among cross- and stable shareholdings, accounting quality, and trade credit are tested. The results indicate that the trade credit of customers without either cross- or stable shareholdings increases with accounting quality, and in most cases, such shareholdings weaken the relationship between accounting quality and trade credit. These findings suggest that close ties to cross- and stable shareholders reduce the importance of accounting information through sharing private information.

Keywords: Accounting quality; Cross-shareholdings; Stable shareholdings; Trade credit (search for similar items in EconPapers)
JEL-codes: G34 M41 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2018-04, Revised 2023-12
New Economics Papers: this item is included in nep-acc
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2018-12.pdf Revised version, 2023 (application/pdf)

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