Bhimani, Alnoor 
ORCID: 0000-0002-1884-5840, Gulamhussen, Mohamed Azzim and Rocha Lopes, Samuel
(2014)
Owner liability and financial reporting information as predictors of firm default in bank loans.
Review of Accounting Studies, 19 (2).
pp. 769-804.
ISSN 1380-6653
Abstract
We examine the effects of owner liability and non-accounting and financial accounting information on the probability of default as defined in Basel II in bank loan contracted by non listed firms. We model default as a function of owner liability and accounting and non-accounting information of non-listed firms, drawing on 43,117 annual accounts of 16,029 firms over a 7-year period. Our estimations based on mixed logistic regressions with random parameters show that the predicted default probability of full-liability firms is 0.72 times that of limited liability firms. The likelihood ratio test for omitted variables confirms the additional predictive ability of liability status over and above other non-accounting and financial accounting information. A Heckman self-selection model does not indicate sampling bias. The particular definition of default used in the study enables the findings to be generalizable across other institutional contexts.
| Item Type: | Article |
|---|---|
| Official URL: | http://link.springer.com/journal/11142 |
| Additional Information: | © 2014 Springer, Part of Springer Science+Business Media |
| Divisions: | Accounting |
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance |
| Date Deposited: | 22 Jan 2014 12:14 |
| Last Modified: | 12 Dec 2024 00:35 |
| URI: | http://eprints.lse.ac.uk/id/eprint/55396 |
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