| dc.description.abstract | This paper investigates the relationship among investment efficiency, financial reporting quality and debt maturity for a number of listed firms on Ho Chi Minh Stock Exchange (HOSE) over period from 2012 – 2014. The study employs the proxy for investment efficiency suggested by Biddle et al. (2009) and discretionary accruals as measures of financial reporting quality proposed in the Modified Jones Model by Dechow et al. (1995). The empirical findings demonstrate a strong impact of financial reporting quality on investment efficiency. Specifically, high quality of financial disclosure proves to be an effective mechanism to reduce both underinvestment and overinvestment. Nonetheless, the influence of low debt maturity on the investment projects is relatively insignificant. Besides, the interactive effect between financial reporting quality and debt maturity is also examined. Statistical testing results show that different levels of short-term debt have no meaningful intervention in the relationship between financial reporting quality and investment efficiency. Generally, conclusions from this paper are consistent with prior studies, especially the research by Dariush et al. (2014). It is inferred that firms can increase profitability of the investment opportunities by upgrading financial disclosure quality.
Keywords: Investment Efficiency, Financial Reporting Quality, Debt Maturity, Short-term Debt, Underinvestment, Overinvestment | en_US |
