Can the cure kill the patient? Corporate credit interventions and debt overhang

Crouzet, Nicolas; Tourre, Fabrice

doi:10.2139/ssrn.3954581

Cited by 5 publications

(6 citation statements)

References 48 publications

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“…However, all these from different perspectives affect the capital structure and emphasize the necessity of an index in order to reveal the overall 'compounding' impact of all these policies. For instance, the increase in liquidity leads to changes in capital structure and a decrease in productivity due to the adverse effect of loan guarantees (Acharya et al 2021b;Crouzet and Tourre 2021;Kalemli-Ozcan et al 2022). The machine-based definition of financial-based resilience index considers all capitalization ratios (e.g.…”

Section: The Necessity Of Financial Intuition Of Resiliencementioning

confidence: 99%

Workplace sustainability or financial resilience? Composite-financial resilience index

Daadmehr

2024

Risk Manag

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Due to the variety of corporate risks in turmoil markets and the consequent financial distress especially in COVID-19 time, this paper investigates corporate resilience and compares different types of resilience that can be potential sources of heterogeneity in firms’ implied rate of return. Specifically, the novelty is not only to quantify firms’ financial resilience but also to compare it with workplace resilience which matters more in the COVID-19 era. The study prepares several pieces of evidence of the necessity and insufficiency of these two main types of resilience by comparing earnings expectations and implied discount rates of high- and low-resilience firms. Particularly, results present evidence of the possible amplification of workplace resilience by the financial status of firms in the COVID-19 era. The paper proposes a novel composite-financial resilience index as a potential measure for disaster risk that significantly and persistently reveals low-resilience characteristics of firms and resilience-heterogeneity in implied discount rates.

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Section: The Necessity Of Financial Intuition Of Resiliencementioning

confidence: 99%

Workplace sustainability or financial resilience? Composite-financial resilience index

Daadmehr

2024

Risk Manag

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“…Therefore, it is salutary to emphasize that governmental authorities need to understand that the information in financial statements during periods of economic anomalies may be biased due to companies deciding to take care of their own interests by seeking lower cost financing through government subsidies (Crouzet and Tourre, 2020), as well as posting losses in underperforming investments that should have been reported in previous quarters (Laskaridou and Athanasios, 2013).…”

Section: Final Thoughtsmentioning

confidence: 99%

“…Deninson and Williams, 2015; Graves and Radcliffe, 2004; Trombetta, 2019). However, governmental authorities need to understand that data from financial statements during periods of economic anomalies may be biased so that organizations achieve goals of particular interest to them such as securing financing with lower interest rates based on governmental subsidies (Crouzet and Tourre, 2020), by posting losses from underperforming investments that should have been recorded in previous years (Laskaridou and Athanasios, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Earnings management during the COVID-19 crisis: evidence from the Brazilian and American capital markets

Flores

Sampaio²,

Beiruth

et al. 2023

JAEE

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PurposeThe main purpose of this study is to evaluate whether the COVID-19 pandemic has stimulated earnings management among publicly traded companies in Brazil and the USA.Design/methodology/approachThe authors analyzed the above-mentioned effects based on 22,244 observations of Brazilian companies and 139,856 observations of American companies from 1998 to 2020. The proxy used to detect earnings management based on discretionary accruals (DAC) was obtained by using the Modified Jones Model (MJM) (Dechow et al., 1995), with adjustments suggested by Kothari et al. (2005). In accordance with previous studies (e.g. Brown et al., 2015; Enomoto et al., 2015; Galdi et al., 2020; Huang and Sun, 2017; Roychowdhury, 2006), the authors also employed a second proxy to detect earnings management through real activities associated with unusual losses for fixed assets (property, plant and equipment (PPE)).FindingsThe study’s findings indicate that the discretionary accruals of Brazilian companies varied in a more accentuated manner during the COVID-19 pandemic, making it possible to deduce that a recent history of economic depression may entail greater incentives for earnings management in an emerging economy. In addition, the authors verified that the effects of the current crisis on earnings management proxies denote a signal that is distinct from previous economic crises, which may be interpreted as an attempt to postpone the effects of the pandemic on financial statements, especially those of the Brazilian capital markets.Originality/valueUnlike previous crises, this pandemic has led to direct restrictions on a wide variety of economic segments rather than indirect contagion due to anomalies in the financial markets, making it a phenomenon with the characteristics of a quasi-natural experiment for studies related to the quality of accounting information. Considering that both Brazil and the USA provide an opportune economic contrast, given their discrepancies in terms of economic growth over the past two decades, the researchers believe that there is an unusual opportunity to understand how earnings management can be an incentive for managers in environments where crises arose from natural causes.

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“…Data laporan keuangan perusahaan dapat menjadi bias karena perubahan ekonomi di masa pandemi. Hal ini berkaitan dengan perusahaan dalam memperoleh pembiayaan dengan suku bunga lebih rendah dari subsidi pemerintah (Crouzet & Tourre, 2021). Auditor dan pengguna informasi keuangan harus memberikan perhatian yang besar dan berhati-hati terhadap laporan keuangan, mengingat adanya kemungkinan prosedur yang tidak sepenuhnya sesuai dengan kualitas informasi akuntansi (Flores et al, 2023).…”

Section: Pendahuluanunclassified

Pengaruh Penghindaran Pajak Dan Tata Kelola Perusahaan Terhadap Manajemen Laba Dengan Tanggung Jawab Sosial Sebagai Variabel Moderasi

Ramadana,

Irawan,

Butar-Butar

2023

akurasi

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Praktik manajemen laba berdampak terhadap kualitas laporan keuangan yang dapat mempengaruhi keputusan investor dan reputasi perusahaan. Penelitian ini bertujuan menginvestigasi pengaruh moderasi dari CSR dalam hubungan antara penghindaran pajak dan tata kelola perusahaan terhadap praktik manajemen laba. Sejumlah 197 sampel dari 49 perusahaan yang terdaftar di Bursa Efek Indonesia selama periode 2018-2022 dianalisis menggunakan regresi linear berganda. Hasil penelitian menunjukkan penghindaran pajak dan komisaris wanita berpengaruh signifikan negatif terhadap manajemen laba, sedangkan komisaris independen dan kualitas audit berpengaruh signifikan positif terhadap manajemen laba. CSR memoderasi positif pengaruh komisaris wanita terhadap manajemen laba, namun memoderasi negatif kualitas audit terhadap manajemen laba. Hasil penelitian ini mengimplikasikan bahwa struktur dan komposisi dewan komisaris, termasuk keberadaan komisaris wanita, dapat memainkan peran penting dalam mengelola manajemen laba, sementara kualitas audit sangat tergantung pada penerapan standar audit yang ketat.

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Can the cure kill the patient? Corporate credit interventions and debt overhang

Cited by 5 publications

References 48 publications

Workplace sustainability or financial resilience? Composite-financial resilience index

Workplace sustainability or financial resilience? Composite-financial resilience index

Earnings management during the COVID-19 crisis: evidence from the Brazilian and American capital markets

Pengaruh Penghindaran Pajak Dan Tata Kelola Perusahaan Terhadap Manajemen Laba Dengan Tanggung Jawab Sosial Sebagai Variabel Moderasi

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