Does the Relationship between Accounting Disclosure and Bank Loan Contracts Vary with Borrower Characteristics? Evidence from Emerging Markets

  • Dekui Li Wuhan Yangtze Business University
  • Liang Song Michigan Technological University
  • Zhaoguo Zhang Huazhong University of Science and Technology


We examine how borrower characteristics affect the relationship between accounting disclosure and bank loan contracts in emerging economies. We find that the effects of accounting disclosure on bank loan contracting terms such as  the loan size, the loan maturity, and the loan spread, are more significant for borrowers with smaller size, higher leverage, lower profitability, lower tangibility, less diversity, younger age, and less lending relationship. These results suggest that the relationship between accounting disclosure and bank loan contracting terms are more pronounced for firms with higher credit risk.

Author Biography

Liang Song, Michigan Technological University
Asistant Professor of Accounting
Research Articles