Please use this identifier to cite or link to this item: http://hdl.handle.net/2080/3922
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dc.contributor.authorParida, Mamatanjali-
dc.contributor.authorMahadik, Dushyant A-
dc.date.accessioned2023-01-18T04:53:57Z-
dc.date.available2023-01-18T04:53:57Z-
dc.date.issued2022-12-
dc.identifier.citation11th India Finance Conference, IIM calcutta, 19-21 December 2022en_US
dc.identifier.urihttp://hdl.handle.net/2080/3922-
dc.descriptionCopyright belongs to proceeding publisheren_US
dc.description.abstractIn this study, we examine how debt financing in general and bank borrowings in particular affect the earnings quality in Indian firms. We conduct an empirical analysis taking a sample of 626 Indian non-financial firms from 2003 to 2021. Our sample comes from the Food and Agro-based industry, which is divided into four relatively homogenous groups. On each of the groups, we apply an industry-wise cross-sectional version of modified Jones model (Dechow et al. 1995) for estimating the discretionary accruals, a measure for earnings quality. Testing the hypotheses using industry fixed effects, for four sub-sectors, we found that debt financing is positively associated with discretionary accruals (negatively associated with earnings quality). We interpret this as a sign of discretion applied by opportunistic managers of borrowing firms in order to showcase a good financial position for reducing the cost of covenant violation. Further, age and size of the firms are positively related to earnings quality while leverage has a negative impact, along expected lines.en_US
dc.subjectearnings qualityen_US
dc.subjectdiscretionary accrualen_US
dc.subjectdebt financingen_US
dc.subjectdebt covenantsen_US
dc.subjectagency theoryen_US
dc.titleRole of Creditors in Monitoring Earnings Quality in Indiaen_US
dc.typePresentationen_US
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