An Empirical Study Of The Influence Of The Quality Of Accounting Information To The Cost Of Long-term Borrowing In The Bank

Bank credit financing is an important source of the funds required for the operation anddevelopment, but the information asymmetry between banks and corporations will seriouslyaffect the efficiency of capital allocation, which results in a large number of non-performingloans and damages the interest of the banks. As a medium for reducing the level ofinformation asymmetry, accounting information has set up a bridge of communicationbetween listed companies and fund providers such as banks. Banks can set out credit contractsto protect their own interests based on the quality of accounting information of listedcompanies. Taking the rating of information in Shenzhen as the proxy variable of the qualityof accounting information, this paper makes a depth survey of the influence of the quality ofaccounting information to bank’s cost in the long-term borrowing, which enriches researchliterature, accumulating empirical evidence based on the background of China’s institution.This study is helpful for institutional investors and creditors to make credit decision with theauthoritative evaluation of regulators, reducing the cost of their own access to information,alleviating the pressure of debt financing, encouraging initiative to strengthen the constructionof information quality, obtaining lower cost by improving the quality of accountinginformation, which has important practical significance for regulators to set up scientific andreasonable policies.The paper combines normative research with empirical research and follows the logicalthinking of asking questions, theoretical analysis, empirical test and policy advices. First of all,the paper starts with the background and significance of research, reviewing the existingresearch literature. Second, the paper analyzes the influence of the quality of accountinginformation to bank’s cost in the long-term borrowing, using theories of credit contract,information asymmetry, signal transmission and principal-agent,which shows that the higherthe quality of accounting information, the lower the bank’s cost in the long-term borrowingpossibly. Finally, the paper makes A-share non-financial listed companies as samples ofresearch in Shenzhen stock exchange in2007-2012, using the method of empirical research,and study the influence of the quality of accounting information to bank’s cost in thelong-term borrowing with empirical research model. Considering the differences of nature ofproperty right, the paper further studies the influence of nature of property to the relationship between the quality of accounting information and bank’s cost in the long-term borrowing.The result shows that the high quality accounting information can display the function ofsignal transmission and is advantageous for banks to estimate risk of credit companies,significantly reducing the cost of long-term borrowing of banks. Based on the group ofproperty rights, the result further shows that institutional factor has an effect on the role ofquality of accounting information in the credit financing. Recessive guarantee of state-ownedproperty right can weaken the signal transmission of the quality of accounting information.Compared to private listed companies, the positive impact of the quality of accountinginformation to the cost of financing will weaken in the state-owned listed companies. Throughthe above conclusions, the listed companies can pass the truth to external users by improvingthe quality of accounting information, reducing information risk of investors and creditors,improving efficiency of financing, reducing cost of financing.