Accounting Quality and Firm-Level Capital Investment - HEC Paris - École des hautes études commerciales de Paris Access content directly
Journal Articles The British Accounting Review Year : 2006

Accounting Quality and Firm-Level Capital Investment

Gary C. Biddle
  • Function : Author


This study examines how accounting quality relates to firm-level capital investment efficiency. Our first hypothesis is that higher quality accounting enhances investment efficiency by reducing information asymmetry between managers and outside suppliers of capital. Our second hypothesis is that this effect should be stronger in economies where financing is largely provided through arm's-length transactions compared with countries where creditors supply more capital. Our results are consistent with these hypotheses both across and within countries. They are robust to alternative econometric specifications, different measures of accounting quality and investment-cash flow sensitivity, and numerous control variables.


Not file

Dates and versions

hal-00481720 , version 1 (07-05-2010)


  • HAL Id : hal-00481720 , version 1


Gilles Hilary, Gary C. Biddle. Accounting Quality and Firm-Level Capital Investment. The British Accounting Review, 2006, vol.81, n°5, pp. 963-982. ⟨hal-00481720⟩


577 View
0 Download


Gmail Facebook Twitter LinkedIn More