Impact of Leverage on Financial Information Quality

Earnings are a key firm- performance yardstick for investors. The quality of earnings has fascinated researchers and investors alike, as it may be manipulated by a firm’s management. This paper studies the relationship between earnings quality and debt levels of firms in the hospitality sector, using a sample of 642 firms from 26 countries for the 2002– 2016 period. Results of this study suggest a gen-erally positive relationship between a firm’s leverage and its earnings quality in the hospitality sector, particularly for firms incorporated in countries with stronger investor protection. As such, some inter-esting implications of the leverage-earnings quality relationship are revealed for investors, lenders, and professionals in the hospitality industry.

Références

Titre
Impact of Leverage on Financial Information Quality
Type de publication
Article de revue
Année de publication
2020
Revue
The Journal of Hospitality Financial Management
Volume
28
Ticket
1
Pagination
30-43
Soumis le 7 mai 2020