Small Business Economics

, Volume 53, Issue 4, pp 1033–1050 | Cite as

Accounting information quality and guaranteed loans: evidence from Japanese SMEs

  • Hyonok Kim
  • Yukihiro YasudaEmail author


We empirically investigate the effects of accounting information quality, as measured by accruals quality, on the use of government guaranteed loans, which we regard as a form of transaction lending. We find that higher accruals quality is associated with higher usage rates of government guaranteed loans, but not with those of nonguaranteed loans, which we consider to constitute relationship lending within the Japanese context. We also find that higher accruals quality is not related to the interest rate for guaranteed loans, but rather is associated with a lower interest rate for nonguaranteed loans. These results indicate that the relevant accounting information is effectively used in screening processes for small- and medium-sized enterprises (SMEs), but that effectiveness varies, depending on the particular lending technology employed.


Accruals quality Guaranteed loans Transaction lending Relationship lending Interest rates 

JEL classification

G21 G31 G32 L26 



We thank Julie Ann Elston (editor) and anoymous referees. This study is conducted as a part of the Project “Corporate financing and firm dynamics study group” undertaken at Research Institute of Economy, Trade and Industry (RIETI). The original title of this paper was “Accounting Information Quality and Government Guaranteed Loans: Evidence from Japanese SMEs.” The authors are grateful to the valuable comments and suggestions by Masayuki Morikawa (RIETI), Keiichiro Oda (RIETI), Hiroshi Ohashi (University of Tokyo), Makoto Yano (Kyoto University), Olga Kandinskaia (CIIM), Arito Ono (Cho University), Iichrio Uesugi (Hitotsubashi University), DaisukeTsuruta (Nihon University), Shinya Okuda (Nagya City University), Kazuki Yokoyama (Nagoya City University), Kazuho Yoshida (Nagya City University), Joseph French (University of Northern Colorado), James A. Wilcox (University of California, Berkeley) and the members of the RIETI study group.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Faculty of Business AdministrationTokyo Keizai UniversityKokubunjiJapan
  2. 2.School of Business AdministrationHitotsubashi UniversityKunitachiJapan

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