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1 – 1 of 1Syou-Ching Lai, Yuh-Shin Lin, Yi-Hung Lin and Hua-Wei Huang
– This paper aims to examine the relation between the cost of debt and the adoption of eXtensible Business Reporting Language (XBRL).
Abstract
Purpose
This paper aims to examine the relation between the cost of debt and the adoption of eXtensible Business Reporting Language (XBRL).
Design/methodology/approach
The financial data are obtained from the Compustat database. Regression analysis is used to examine the research hypotheses.
Findings
The authors find that both voluntary and mandatory adoption of XBRL lead to a lower cost of debt for firms, with weak evidence that this reduction is greater for the former than the latter.
Research limitations/implications
The findings support the policy of the USA Securities and Exchange Commission (SEC), and thus this paper recommends that adoption of XBRL should be mandatory for all public firms.
Practical implications
The findings encourage top managers to develop their firms’ XBRL systems.
Originality/value
The results support the SEC’s policy of mandatory XBRL adoption, as it can lead to greater financial reporting transparency and mitigate information asymmetry between management and bondholders.
Details