Do audited firms have better access to credit?: Evidence from emerging countries

AbstractThis study aims to examine the relationship of having financial statements audited by external auditors and access to bank credit, using data from the Business Environment and Enterprise Performance Survey (BEEPS). Among firms having credit access, this research further analyses the impacts...

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Bibliographic Details
Main Author: Yaqoub Alduraywish
Format: Article
Language:English
Published: Taylor & Francis Group 2023-12-01
Series:Cogent Business & Management
Subjects:
Online Access:https://www.tandfonline.com/doi/10.1080/23311975.2023.2195985
Description
Summary:AbstractThis study aims to examine the relationship of having financial statements audited by external auditors and access to bank credit, using data from the Business Environment and Enterprise Performance Survey (BEEPS). Among firms having credit access, this research further analyses the impacts of auditing financial statements on loan value, loan rate, and loan term (duration) by applying the Heckman two-step models with sample selection. Results show that firms with audited financial statements have better formal credit access than their counterparts. Among these, audited firms obtain bigger loan value, have lower loan rates and shorter borrowing duration, as compared to non-audited firms. Results are robust when applying the Propensity Score Matching.
ISSN:2331-1975