Back to Search
Start Over
Credit Availability and Voluntary Disclosures: Evidence from Interstate Bank Branching Deregulation
- Source :
- SSRN Electronic Journal.
- Publication Year :
- 2021
- Publisher :
- Elsevier BV, 2021.
-
Abstract
- This study examines whether the increased availability of bank loans affects borrowers’ voluntary disclosures. Exploiting the staggered deregulation of interstate bank branching across states in the U.S., I find that bank-dependent firms decrease their voluntary disclosures following bank branching deregulation. This overall effect is muted for firms with higher information asymmetry in the public capital markets and higher litigation risk. Furthermore, the decline in voluntary disclosures is more pronounced among borrowers with higher proprietary information costs and stronger lending relationships with their lenders. Further analysis reveals that bank-dependent firms that stop issuing earnings guidance after branching deregulation experience decreased liquidity in the equity market. Overall, this paper sheds light on how regulatory changes in the banking sector have externalities on borrowers’ disclosure decisions.
- Subjects :
- History
Polymers and Plastics
Equity (finance)
Financial system
Public capital
Industrial and Manufacturing Engineering
Litigation risk analysis
Market liquidity
Deregulation
Information asymmetry
Earnings guidance
Business
Business and International Management
health care economics and organizations
Externality
Subjects
Details
- ISSN :
- 15565068
- Database :
- OpenAIRE
- Journal :
- SSRN Electronic Journal
- Accession number :
- edsair.doi...........7e0b24b6c2b44d498d1f28a23a6a7d7e