Externally Financed Growth and Quality Accounting Information

Abstract

This study investigates the association between quality accounting information (QAI) and externally financed growth (EFG), taking a sample of 214 firms in Brazilian stock exchange from 1998 to 2015. EFG is estimated from the sales percentage approach to financial planning. QAI is estimated according to the accruals quality model proposed by Dechow and Dichev and modified by McNichols. The hypothesis that signaling efficient accounting information marginally influences and positively EFG is tested by multiple linear regression with estimation by OLS and could not be rejected. It is inferred that QAI is a significant attribute in contributing to the firm's access to the external financing channel. This study broadens the discussions about the themes in the Brazilian scenario, shedding light on the importance of the practice of the dissemination of quality information for the growth of firms in the Brazilian context.