Auditor choice and information asymmetry: Evidence from international syndicated loans
Analyzing a large sample of non-US public firms from 31 countries that obtain private loans, we find that loan syndicates that lend to borrowers that employ Big N auditors are larger and less concentrated and that the lead arrangers and largest investors of these syndicates are able to hold a lower...
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sg-smu-ink.soa_research-28412020-02-28T03:03:24Z Auditor choice and information asymmetry: Evidence from international syndicated loans MA, Zhiming STICE, Derrald WANG, Rencheng Analyzing a large sample of non-US public firms from 31 countries that obtain private loans, we find that loan syndicates that lend to borrowers that employ Big N auditors are larger and less concentrated and that the lead arrangers and largest investors of these syndicates are able to hold a lower proportion of the loan after issuance. Further analysis demonstrates that this effect exists only in countries with strong creditor rights and in those countries with high levels of societal trust, suggesting that both sound formal and informal institutional factors are prerequisites for lenders and borrowers to benefit from differential audit quality on loan syndicate structure efficiency. Furthermore, we find that the loan syndicate structure benefits for borrowers that employ Big N auditors are higher for borrowers with greater information asymmetry problems, but we do not find that Big N audits are able to address the information asymmetry and moral hazard issues between the lenders themselves. 2019-06-07T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1814 info:doi/10.1080/00014788.2018.1507810 https://ink.library.smu.edu.sg/context/soa_research/article/2841/viewcontent/Auditor_Choice_IA_sv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University big N auditors international debt markets loan syndicate structure creditor rights trust Accounting Corporate Finance |
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big N auditors international debt markets loan syndicate structure creditor rights trust Accounting Corporate Finance MA, Zhiming STICE, Derrald WANG, Rencheng Auditor choice and information asymmetry: Evidence from international syndicated loans |
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Analyzing a large sample of non-US public firms from 31 countries that obtain private loans, we find that loan syndicates that lend to borrowers that employ Big N auditors are larger and less concentrated and that the lead arrangers and largest investors of these syndicates are able to hold a lower proportion of the loan after issuance. Further analysis demonstrates that this effect exists only in countries with strong creditor rights and in those countries with high levels of societal trust, suggesting that both sound formal and informal institutional factors are prerequisites for lenders and borrowers to benefit from differential audit quality on loan syndicate structure efficiency. Furthermore, we find that the loan syndicate structure benefits for borrowers that employ Big N auditors are higher for borrowers with greater information asymmetry problems, but we do not find that Big N audits are able to address the information asymmetry and moral hazard issues between the lenders themselves. |
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MA, Zhiming STICE, Derrald WANG, Rencheng |
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MA, Zhiming STICE, Derrald WANG, Rencheng |
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MA, Zhiming |
title |
Auditor choice and information asymmetry: Evidence from international syndicated loans |
title_short |
Auditor choice and information asymmetry: Evidence from international syndicated loans |
title_full |
Auditor choice and information asymmetry: Evidence from international syndicated loans |
title_fullStr |
Auditor choice and information asymmetry: Evidence from international syndicated loans |
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Auditor choice and information asymmetry: Evidence from international syndicated loans |
title_sort |
auditor choice and information asymmetry: evidence from international syndicated loans |
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Institutional Knowledge at Singapore Management University |
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2019 |
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https://ink.library.smu.edu.sg/soa_research/1814 https://ink.library.smu.edu.sg/context/soa_research/article/2841/viewcontent/Auditor_Choice_IA_sv.pdf |
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1770574990023852032 |