Topic: Effects of Borrower and Lender Ownership Type on Accounting Conservatism
Presenter：Yanyan Wang, assistant professor in accounting, IFAS
Time: March 13, 2009（Friday）3:00—4:30PM
Venue: Room 501, Jiageng Bld 2
Abstract：
We examine the joint effect of borrower (firm) and lender (bank) ownership type on the demand for accounting conservatism for a sample of Chinese firms. We hypothesize that conservatism is stronger for family-owned firms (FOFs) than for state-owned enterprises (SOEs) because lenders are more concerned with downside risk for FOFs than for SOEs. We also hypothesize that firms that borrow from non-state-owned banks (NSBs) adopt more conservative accounting than firms that borrow from state-owned banks (SBs) because NSBs have stronger demand for assurance of sufficient net assets to cover loan repayments than SBs. We find that (1) FOFs that borrow from NSBs are more conservative than FOFs that borrow from SBs, (2) FOFs that borrow from SBs are more conservative than SOEs that borrow from SBs, and (3) FOFs that borrow from NSBs are more conservative than SOEs that borrow from NSBs.
Download:paper