Accounting information quality and trust as determinants of credit granting to SMEs: the role of external audit

Estefanía Palazuelos (), Angel Herrero Crespo () and Javier Montoya Corte ()
Additional contact information
Estefanía Palazuelos: Universidad de Cantabria
Javier Montoya Corte: Universidad de Cantabria

Small Business Economics, 2018, vol. 51, issue 4, No 5, 877 pages

Abstract: Abstract This study analyses whether loan officers’ perception of the accounting information quality (AIQ) and the trustworthiness of SMEs are associated with a better willingness to grant them credit. Empirical evidence is obtained from a survey of 471 bank loan officers in Spain, who are asked to answer in relation to audited and not-audited firms. Using a Structural Equation Modeling (SEM) approach, the results obtained confirm that the loan officers’ willingness to facilitate SMEs’ access to credit is positively influenced by their general perception about the AIQ, but only if it is audited. In the case of not-audited firms, AIQ does not play a direct role in credit granting decision, but is relevant in trust formation. Besides, in the case of audited firms, only the “competence” dimension of trust is relevant, whereas in not-audited firms, both “competence” and “honesty” have an impact on credit granting. “Benevolence” does not have an influence in any case. The study has implications for SMEs, banks, policy makers and auditors.

Keywords: SMEs; Credit granting; Loan officers; Accounting information quality; Trust; External audit; G21; M42 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1007/s11187-017-9966-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:51:y:2018:i:4:d:10.1007_s11187-017-9966-3

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-017-9966-3

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().