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Do industry-specific accounting standards matter for capital allocation decisions?

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Do industry-specific accounting standards matter for capital allocation decisions? / Fiechter, P.; Landsman, W.R.; Peasnell, K. et al.
In: Journal of Accounting and Economics, 18.12.2023.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Fiechter, P, Landsman, WR, Peasnell, K & Renders, A 2023, 'Do industry-specific accounting standards matter for capital allocation decisions?', Journal of Accounting and Economics. https://doi.org/10.1016/j.jacceco.2023.101670

APA

Fiechter, P., Landsman, W. R., Peasnell, K., & Renders, A. (2023). Do industry-specific accounting standards matter for capital allocation decisions? Journal of Accounting and Economics, Article 101670. https://doi.org/10.1016/j.jacceco.2023.101670

Vancouver

Fiechter P, Landsman WR, Peasnell K, Renders A. Do industry-specific accounting standards matter for capital allocation decisions? Journal of Accounting and Economics. 2023 Dec 18;101670. doi: 10.1016/j.jacceco.2023.101670

Author

Fiechter, P. ; Landsman, W.R. ; Peasnell, K. et al. / Do industry-specific accounting standards matter for capital allocation decisions?. In: Journal of Accounting and Economics. 2023.

Bibtex

@article{7f966d02c91a40ba9ee5b3bb3244bdb8,
title = "Do industry-specific accounting standards matter for capital allocation decisions?",
abstract = "This study examines whether the implementation of industry-specific accounting standards helps capital market participants in making decisions about providing capital to firms. We predict and find an, on average, increase in firms{\textquoteright} capital growth in years following implementation of the relevant industry standard. The increase in capital growth arises primarily from equity issuances and is attributable to the implementation of the standards rather than industry-specific trends or economic shocks. We explore heterogeneity in industry standards and find more pronounced effects for (i) industry standards that reveal new information, provide explicit guidance, or increase accounting uniformity, and (ii) small firms, firms with greater information asymmetry, and firms with greater capital constraints before implementation of the standards. We also find evidence consistent with two channels explaining the documented increase in capital flows: reduction of information asymmetry and increase in financial statement comparability.",
author = "P. Fiechter and W.R. Landsman and K. Peasnell and A. Renders",
year = "2023",
month = dec,
day = "18",
doi = "10.1016/j.jacceco.2023.101670",
language = "English",
journal = "Journal of Accounting and Economics",
issn = "0165-4101",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Do industry-specific accounting standards matter for capital allocation decisions?

AU - Fiechter, P.

AU - Landsman, W.R.

AU - Peasnell, K.

AU - Renders, A.

PY - 2023/12/18

Y1 - 2023/12/18

N2 - This study examines whether the implementation of industry-specific accounting standards helps capital market participants in making decisions about providing capital to firms. We predict and find an, on average, increase in firms’ capital growth in years following implementation of the relevant industry standard. The increase in capital growth arises primarily from equity issuances and is attributable to the implementation of the standards rather than industry-specific trends or economic shocks. We explore heterogeneity in industry standards and find more pronounced effects for (i) industry standards that reveal new information, provide explicit guidance, or increase accounting uniformity, and (ii) small firms, firms with greater information asymmetry, and firms with greater capital constraints before implementation of the standards. We also find evidence consistent with two channels explaining the documented increase in capital flows: reduction of information asymmetry and increase in financial statement comparability.

AB - This study examines whether the implementation of industry-specific accounting standards helps capital market participants in making decisions about providing capital to firms. We predict and find an, on average, increase in firms’ capital growth in years following implementation of the relevant industry standard. The increase in capital growth arises primarily from equity issuances and is attributable to the implementation of the standards rather than industry-specific trends or economic shocks. We explore heterogeneity in industry standards and find more pronounced effects for (i) industry standards that reveal new information, provide explicit guidance, or increase accounting uniformity, and (ii) small firms, firms with greater information asymmetry, and firms with greater capital constraints before implementation of the standards. We also find evidence consistent with two channels explaining the documented increase in capital flows: reduction of information asymmetry and increase in financial statement comparability.

U2 - 10.1016/j.jacceco.2023.101670

DO - 10.1016/j.jacceco.2023.101670

M3 - Journal article

JO - Journal of Accounting and Economics

JF - Journal of Accounting and Economics

SN - 0165-4101

M1 - 101670

ER -