The Research About The Relationship Between Accounting Information Quality And Debt Financing Based On Monetary Policy

Debt financing is one of the main financing modes that our country’s enterprises use. Debt financingmainly refers to bank credit, corporate bonds, leases, and other debt instruments. In the period oftransitional economies, because of national policy, geographical location and enterprise resourceendowments, different enterprises face different levels of financing difficulty. As a result, they havedifferent financing options. High-quality accounting information is the premise and foundation for correctcorporate financing and decision-making activities. It affects the effectiveness and efficiency of thefinancing of enterprises. In reality, the realization of accounting information quality’s function is closelyrelated to a country’s institutional background., such as the level of financial development, the level ofgovernment intervention, legal environment, monetary policy, fiscal policy and so on. Our country’seconomy is in transition period, domestic and international situation changes quickly, monetary policyneeds to adjust constantly to meet the needs of economic development, so as to realize the expectedeconomic development goals. Changes in monetary policy are more easy and more frequent than otherinstitutional background in the short term. It’s inevitable that Changes in monetary policy have a importantimpact on the achievement of the quality of accounting information. Therefore, based on this idea, thisarticle studies the relationship between the quality of accounting information and debt financing from theperspectives of bank credit and trade credit based on our country’s monetary policy background.In this paper, by using a sample of listed companies in China from2003to2011and combining theresearch methods of archival and normative together, on the foundation of relevant research results at homeand abroad, we study the company’s accounting quality of information’s effects on financing modes basedon the monetary policy background under the different nature of property rights.The empirical results are as follows.The higher the quality of accounting information, the moreenterprises obtain bank credit and trade credit. It means that accounting information has debt covenantsusefulness. But debt covenants usefulness of accounting information affected by the nature of the property,the state-owned property rights reduce debt covenants usefulness of accounting information.Changes inmonetary policy affect the availability of bank credit. Tightened monetary policy reduces the corporatebanking credit. Compared with the state-owned enterprises, changes in monetary policy have more effecton non-state-owned corporate banking credit and mainly on long-term bank credit.The reason whystate-owned enterprises can obtain a great amount of long-term bank credit mainly due to credit rationing,the presence of soft budget constraint and natural advantage of the policy. Non-state-owned enterprises arestill facing credit discrimination. In tightened monetary policy period, non-state-owned enterprises facebank credit financing difficulties, but gain more trade credit than loosed monetary policy period. Tradecredit financing exists as an alternative. This article further takes the quality of accounting information intoaccount and examines the impact on debt financing based on monetary policy background. Afterconsidering the changes of monetary policy, we found that companies with high quality of accounting information has a higher debt capacity, quality of accounting information positively correlated with thebank credit facility, and in tightened monetary policy period, companies with higher quality of accountinginformation gained more bank credit. Meanwhile, the quality of accounting information helps enterprisesget more trade credit financing. The state-owned property rights weaken the usefulness of accountinginformation, but the degree of weakness is influenced by changes of monetary policy. The high quality ofaccounting information can smooth financial fluctuations in corporate and helps them improve the ability torespond to changes of monetary policy.