Debt Contract Enforcement and Conservatism: Evidence from a Natural Experiment
利用印度各州加强债务合同执行的自然实验，研究发现执行力度增强显著提高了借款企业及时确认损失的程度，且该效应在增加借款和拥有大量有形资产的企业中更强，表明债权人需求驱动了会计保守主义。
ABSTRACT This study provides evidence that the use of conservative accounting in debt contracting depends on the enforceability of the contract. To test the effect of debt contract enforcement on borrowers' timely loss recognition, we exploit the staggered introduction of enhanced debt contract enforcement in Indian states as a natural experiment, where the implementation of the enforcement is exogenous to the accounting choices and borrowing behavior of firms. The main results show that enhanced enforcement has a significant positive effect on the timeliness of loss recognition of borrowing firms. We find that the effect is strongest for firms that increased their overall borrowing and for firms with high levels of tangible assets, consistent with a collateral‐based explanation. This study also provides causal evidence that firms adopt conservative accounting due to lenders' demand.