The Role of Financial Reporting Quality and Disclosure Quality in Increasing Commercial Credit
One way to increase business credit is to reduce the information asymmetry between buyer and seller. By increasing the financial reporting quality and disclosure quality, buyers can provide more information to their vendors on their financial position and performance, reduce the existing information...
| Main Authors: | , |
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| Format: | Article |
| Language: | fas |
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University of Tehran
2018-05-01
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| Series: | بررسیهای حسابداری و حسابرسی |
| Subjects: | |
| Online Access: | https://acctgrev.ut.ac.ir/article_66298_1e88ce5cc75689211b4c2b9ddc0c152b.pdf |
| _version_ | 1818360045626195968 |
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| author | Abbas Aflatooni Marziye Nemati |
| author_facet | Abbas Aflatooni Marziye Nemati |
| author_sort | Abbas Aflatooni |
| collection | DOAJ |
| description | One way to increase business credit is to reduce the information asymmetry between buyer and seller. By increasing the financial reporting quality and disclosure quality, buyers can provide more information to their vendors on their financial position and performance, reduce the existing information asymmetry and thereby increase the received credit from sellers. This research investigates the relationship between financial reporting quality and disclosure quality with commercial credit in 146 firms listed in the Tehran Stock Exchange during 2004-2016. Because the financial reporting quality and the disclosure quality are endogenous variables, to hypotheses testing, this paper uses the instrumental variable approach along with two stage least squares estimator (2SLS) and compares these results with the results of ordinary least squares estimator (OLS). The results of 2SLS approach show that the increase in financial reporting quality and disclosure quality increases the amount of commercial credit. However, the results of OLS approach show that disclosure quality (and not financial reporting quality) has a significant positive effect on commercial credit. |
| first_indexed | 2024-12-13T20:54:33Z |
| format | Article |
| id | doaj.art-978a8619f9564044ab0b7aa94002b06e |
| institution | Directory Open Access Journal |
| issn | 2645-8020 2645-8039 |
| language | fas |
| last_indexed | 2024-12-13T20:54:33Z |
| publishDate | 2018-05-01 |
| publisher | University of Tehran |
| record_format | Article |
| series | بررسیهای حسابداری و حسابرسی |
| spelling | doaj.art-978a8619f9564044ab0b7aa94002b06e2022-12-21T23:31:47ZfasUniversity of Tehranبررسیهای حسابداری و حسابرسی2645-80202645-80392018-05-0125112010.22059/acctgrev.2018.249054.100778766298The Role of Financial Reporting Quality and Disclosure Quality in Increasing Commercial CreditAbbas Aflatooni0Marziye Nemati1Assistant Prof., Faculty of Economic and Social Sciences, Bu-Ali Sina University, Hamadan, IranMSc. Student in Accounting, Faculty of Economic and Social Sciences, Bu-Ali Sina University, Hamadan, IranOne way to increase business credit is to reduce the information asymmetry between buyer and seller. By increasing the financial reporting quality and disclosure quality, buyers can provide more information to their vendors on their financial position and performance, reduce the existing information asymmetry and thereby increase the received credit from sellers. This research investigates the relationship between financial reporting quality and disclosure quality with commercial credit in 146 firms listed in the Tehran Stock Exchange during 2004-2016. Because the financial reporting quality and the disclosure quality are endogenous variables, to hypotheses testing, this paper uses the instrumental variable approach along with two stage least squares estimator (2SLS) and compares these results with the results of ordinary least squares estimator (OLS). The results of 2SLS approach show that the increase in financial reporting quality and disclosure quality increases the amount of commercial credit. However, the results of OLS approach show that disclosure quality (and not financial reporting quality) has a significant positive effect on commercial credit.https://acctgrev.ut.ac.ir/article_66298_1e88ce5cc75689211b4c2b9ddc0c152b.pdfCommercial creditDisclosure qualityFinancial Reporting QualityInstrumental variablesTwo-stage least squares |
| spellingShingle | Abbas Aflatooni Marziye Nemati The Role of Financial Reporting Quality and Disclosure Quality in Increasing Commercial Credit بررسیهای حسابداری و حسابرسی Commercial credit Disclosure quality Financial Reporting Quality Instrumental variables Two-stage least squares |
| title | The Role of Financial Reporting Quality and Disclosure Quality in Increasing
Commercial Credit |
| title_full | The Role of Financial Reporting Quality and Disclosure Quality in Increasing
Commercial Credit |
| title_fullStr | The Role of Financial Reporting Quality and Disclosure Quality in Increasing
Commercial Credit |
| title_full_unstemmed | The Role of Financial Reporting Quality and Disclosure Quality in Increasing
Commercial Credit |
| title_short | The Role of Financial Reporting Quality and Disclosure Quality in Increasing
Commercial Credit |
| title_sort | role of financial reporting quality and disclosure quality in increasing commercial credit |
| topic | Commercial credit Disclosure quality Financial Reporting Quality Instrumental variables Two-stage least squares |
| url | https://acctgrev.ut.ac.ir/article_66298_1e88ce5cc75689211b4c2b9ddc0c152b.pdf |
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