Corporate disclosures and financial distress in banks in India: the moderating role of competition

IF 2.3 Q2 BUSINESS, FINANCE

Asian Review of Accounting Pub Date : 2022-11-02 DOI:10.1108/ara-03-2022-0064

Shailesh Rastogi, Jagjeevan Kanoujiya

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引用次数: 3

Abstract

PurposeThis study aims to determine the association of Transparency and Disclosure (TD) with financial distress (FID) while the competition (as Lerner Index) moderates the association between the two.Design/methodology/approachThe panel data analysis (static model) is performed to examine the effect of disclosures on the bank's FID. A TD index is built to assess the level of TD. All three versions of Altman's Zscore are employed to measure a bank's FID (High Zscore is opposite of FID). The data of 34 banks running in India for the timeframe 2015–16 to 2018–19 is utilized. Lerner index (LI) is taken as the moderator. The bank-size, valuation and financial leverage are control variables.FindingsThere exists no linear connection between TD and FID. However, TD is positively associated with financial stability (opposite FID). It means TD initially reduces financial stability and improves it after TD crosses a threshold level. Competition (as LI, where the higher value of LI means reduced competition) negatively moderates the association of TD with financial stability. Hence, the findings of this study support the competition-fragility premise. Surprisingly, the negatively significant interaction term of LI and TD implies either high competition and high TD or low competition with low TD, which helps in the bank's financial stability.Originality/valueThe findings provide input to a long-term policy of disclosures and competition in the banking sector, keeping in view the financial stability of the banks. Therefore, findings are novel and carry immense value to the existing knowledge on the topic.

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印度企业披露与银行财务困境：竞争的调节作用

目的本研究旨在确定透明度和披露（TD）与财务困境（FID）的关系，而竞争（如勒纳指数）调节了两者之间的关系。设计/方法/方法进行小组数据分析（静态模型），以检查披露对银行FID的影响。建立TD指数来评估TD水平。所有三个版本的Altman Zscore都用于衡量银行的FID（高Zscore与FID相反）。使用了2015-16年至2018-19年期间在印度运营的34家银行的数据。勒纳指数（LI）作为调节因子。银行规模、估值和财务杠杆是控制变量。发现TD和FID之间不存在线性关系。然而，TD与金融稳定呈正相关（与FID相反）。这意味着道明最初会降低金融稳定性，并在道明超过阈值水平后改善金融稳定性。竞争（如LI，LI的值越高意味着竞争减少）对TD与金融稳定的关系产生负面调节作用。因此，本研究的结果支持了竞争脆弱性的前提。令人惊讶的是，LI和TD的负显著交互项意味着高竞争和高TD或低竞争和低TD，这有助于银行的财务稳定。原创性/价值研究结果为银行业的长期披露和竞争政策提供了投入，同时考虑到了银行的财务稳定性。因此，这些发现是新颖的，对该主题的现有知识具有巨大的价值。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asian Review of Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

25.00%

发文量

期刊介绍： Covering various fields of accounting, Asian Review of Accounting publishes research papers, commentary notes, review papers and practitioner oriented articles that address significant international issues as well as those that focus on Asia Pacific in particular.Coverage includes but is not limited to: -Financial accounting -Managerial accounting -Auditing -Taxation -Accounting information systems -Social and environmental accounting -Accounting education Perspectives or viewpoints arising from regional, national or international focus, a private or public sector information need, or a market-perspective or social and environmental perspective are greatly welcomed. Manuscripts that present viewpoints should address issues of wide interest among accounting scholars internationally and those in Asia Pacific in particular.