Debt financing cost due to bank interest in primary sector companies in southern Jalisco, Mexico
Keywords:
cost of debt financing, accounting regulations, interest rate, financial reporting standardsAbstract
Objective: Analyze the effect of the application of accounting regulations on the cost of financing debt due to bank interest in companies in the primary sector of southern Jalisco, Mexico.
Materials and methods: 11 companies were analyzed, the multiple case study method was used, the interview was used to collect data and, for analysis, linear regression.
Results: It was found that the cost of debt financing in these companies, which apply Mexican accounting regulations, is lower in relation to those that do not apply them. Likewise, the interest rate is more associated with financial information in the companies in that sector that use them.
Conclusions: Primary sector companies that implement Mexican accounting regulations reduce the financing interest rate by 3.25%, reducing the cost of their debt, while those that do not apply them have a higher cost of debt financing due to bank interest
Downloads
References
Ahmed, A., Neel, M., & Wang, D. (2012). Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence. Contemporary Accounting Research, 30(4), 1344-1372. https://doi.org/10.1111/j.1911-3846.2012.01193.x
Baik, B., Berfeld, N., & Verdi, R. (2021). Do public financial statements influence venture capital and private equity financing?. Social Science Research Network https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3867958
Balsmeier, B., & Vanhaverbeke, S. (2018). International financial reporting standards and private firms’ access to bank loans. European Accounting Review, 27(1), 75-104. https://doi.org/10.1080/09638180.2016.1229207
Banco de México. (2022). Evolución del Financiamiento a las empresas durante el Trimestre Julio-Septiembre de 2022. https://www.banxico.org.mx/publicaciones-y-prensa/evolucion-trimestral-del-financiamiento-a-las-empr/%7B0ACD902E-5BF7-6CBA-1D2D-D01C43D0EA05%7D.pdf
Banco de México. (2023). Tasas de Interés Representativas. Por Ciento Anual. https://www.banxico.org.mx/SieInternet/consultarDirectorioInternetAction.do?sector=18&accion=consultarCuadroAnalitico&idCuadro=CA51&locale=es
Bassemir, M., & Novotny-Farkas, Z. (2018). Ifrs adoption, reporting incentives, and financial reporting quality in privatefirms. Journal of Business Finance & Accounting, 45(7-8), 759-796. https://doi.org/10.1111/jbfa.12315
Breuer, M., Hombach, K., & Müller, M. (2018). How does financial reporting regulation affect firms’ banking?. The Review of Financial Studies, 31(4), 1265-1297. https://doi.org/10.1093/rfs/hhx123
Cassar, G., Ittner, C., & Cavalluzzo, K. (2015). Alternative Information Sources and Information Asymmetry Reduction: Evidence from Small Business Debt. Journal of Accounting and Economics, 59(2-3), 242-263. https://doi.org/10.1016/j.jacceco.2014.08.003
Ding, S., Liu, M., & Wu, Z. (2016). Financial reporting quality and external debt financing constraints: The case of privately held firms. Abacus, 52(3), 351-373. https://doi.org/10.1111/abac.12083
García-Teruel, P., Martínez-Solano, P., & Sánchez-Ballesta, J. (2014). Supplier financing and earnings quality. Journal of Business Finance & Accounting, 41(9-10), 1193-1211. https://doi.org/10.1111/jbfa.12090
Gassen, J. (2017). The effect of IFRS for SMEs on the financial reporting environment of private firms: An exploratory interview study. Accounting and Business Research, 47(5), 540-563. https://doi.org/10.1080/00014788.2017.1314105
Gassen, J., & Fülbier, R. (2015). Do creditors prefer smooth earnings? Evidence from European private firms. Journal of International Accounting Research, 14(2), 151-180. https://doi.org/10.2308/jiar-51130
Hellman, N., Nilsson, H., Tylaite, M., & Vural, D. (2022). The Impact of an IFRS for SMEs-Based Standard on Financial Reporting Properties and Cost of Debt Financing: Evidence from Swedish Private Firms. European Accounting Review, 31(5), 1175-1205. https://doi.org/10.1080/09638180.2022.2085758
Ley del Impuesto sobre la Renta. (2021, 12 de noviembre). Diario Oficial de la Federación No 07. https://www.diputados.gob.mx/LeyesBiblio/ref/lisr.htm
Hope, O., & Vyas, D. (2017). Private company finance and financial reporting. Accounting and Business Research, 47(5), 506-537. https://doi.org/10.1080/00014788.2017.1303963
Instituto Nacional de Estadística y Geografía. (2023a). Producto Interno Bruto (PIB) (Tercer trimestre de 2023). http://www.inegi.org.mx/
Instituto Nacional de Estadística y Geografía. (2023b). Indicador Trimestral de la Actividad Económica Estatal, Jalisco (Segundo Semestre 2023). http://www.inegi.org.mx/
Kim, J., Simunic, D., Stein, M., & Yi, C. (2011). Voluntary Audits and the Cost of Debt Capital for Privately-Held Firms: Korean Evidence. Contemporary Accounting Research, 28(2), 585-615. https://doi.org/10.1111/j.1911-3846.2010.01054.x
Lecuona, V. (2009). El financiamiento a las Pymes en México: La experiencia reciente. Economía UNAM, 6(17), 69-91. https://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S1665-952X2009000200004
Minnis, M., & Sutherland, A. (2017). Financial statements as monitoring mechanisms: Evidence from small commercial loans. Journal of Accounting Research, 55(1), 197-233. https://doi.org/10.1111/1475-679X.12127
Minnis, M. (2011). The Value of Financial Statement Verification in Debt Financing: Evidence from Private U.S. Firms. Journal of Accounting Research, 49(2), 457-506. https://doi.org/10.1111/j.1475-679X.2011.00411.x
Secretaría de Agricultura y Desarrollo Rural. (2023). Quinto Informe de labores (2022-2023). https://www.gob.mx/cms/uploads/attachment/file/854499/5IL_2023_AGRICULTURA_compressed.pdf
Vander, H., De Meyere, M., & Van-Cauwenberge, P. (2015). Financial reporting quality and the cost of debt of SMEs. Small Business Economics, 45, 149-164. https://doi.org/10.1007/s11187-015-9645-1
Xiaohu, L., Han, L., & Hong, L. (2022). Analyzing Relationship between Financing Constraints, Entrepreneurship, and Agricultural Company Using AI-Based Decision Support System. Scientific Programming, 2022, 1-9. https://doi.org/10.1155/2022/1634677
Downloads
Published
Issue
Section
Categories
License
Copyright (c) 2024 Management Challenges
![Creative Commons License](http://i.creativecommons.org/l/by-nc/4.0/88x31.png)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.