Threat of entry and the use of discretion in banks’ financial reporting
研究银行管理者如何利用会计自由裁量权（如增加贷款损失准备）来降低报表利润，以阻止潜在竞争者进入市场，对监管者和投资者有参考价值。
This paper studies managers’ use of accounting discretion to deter entry. Using state-level changes in branching regulation under the Interstate Banking and Branching Efficiency Act, I find geographically-constrained community banks increased their loan loss provisions to appear less profitable when faced with the threat of entry by competitors. Additional tests rule out alternative explanations that firm economics or regulators drove the increase. I complement my analyses with survey-based evidence. Findings from the survey confirm that banks prefer to locate in markets where incumbents have high profitability and low credit losses, and that banks use competitors’ financial statements to analyze competition.