The Italian depreciation suspension policy during the COVID-19 pandemic: consequences on private firms’ borrowing capacity

Marco Maria Mattei; Matteo Merlo; Eleonora Monaco

doi:10.1080/17449480.2023.2174444

The Italian depreciation suspension policy during the COVID-19 pandemic: consequences on private firms’ borrowing capacity

Marco Maria Mattei
, Matteo Merlo
, Eleonora Monaco^*

^*Autor correspondente para este trabalho

Resultado de pesquisa › revisão de pares

5 Citações (Scopus)

Resumo

We investigate the consequences of adopting a new accrual-based relief mechanism on private firms’ borrowing capacity. During the COVID-19 pandemic, the Italian government implemented a temporary change in accounting rules that allowed firms to suspend up to the entire amount of their depreciation and amortisation charges. Using a sample of Italian firms from 2018 to 2021 and a difference-in-differences model, we show that the depreciation and amortisation suspension policy (DASP) adopters, compared to non-adopters, access larger loans and negotiate a lower cost of debt than in the pre-DASP period. Our results are robust to additional tests for potential endogeneity and confounding factors such as earnings management and the adoption of other accounting-based relief mechanisms. We provide evidence that accrual-based relief mechanisms have real economic effects and are effective measures to support firms in managing a systemic shock.

Idioma original	English
Páginas (de-até)	166-193
Número de páginas	28
Revista	Accounting in Europe
Volume	20
Número de emissão	2
DOIs	https://doi.org/10.1080/17449480.2023.2174444
Estado da publicação	Publicado - 2023

ODS da ONU

Este resultado contribui para o(s) seguinte(s) Objetivo(s) de Desenvolvimento Sustentável

ODS 3 Boa saúde e bem-estar
ODS 8 Trabalho digno e crescimento económico

Acesso ao documento

10.1080/17449480.2023.2174444

Outros arquivos e links

Link to publication in Scopus

CEGE: Research Center in Management and Economics
Silva, M. (Professor Catedrático), Sousa, R. (Professor Catedrático), Alves, P. (Professor Auxiliar), Madsen, A. (Professor Auxiliar Convidado), Lourenço, A. (Professor Associado), Carvalho, A. S. (Professor Associado), Andrade, A. (Professor Auxiliar), Silva, P. D. (Professor Associado), Vlačić, B. (Professor Auxiliar Convidado), Martins, C. (Professor Auxiliar Convidado), Gomes, C. (Investigador Auxiliar), Gevrek, Z. E. (Professor Auxiliar Convidado), Oliveira, F. G. D. (Professor Associado), Faria, G. (Professor Associado Convidado), Marreiros, H. (Bolseiro), Pinho, J. (Professor Auxiliar Convidado), Machado, J. (Professor Associado), Araújo, J. (Investigador Auxiliar), Pinto, J. (Professor Auxiliar), Rego, A. (Professor Catedrático), Gaspar, J. M. (Investigador Auxiliar), Corbo, L. (Professor Auxiliar Convidado), Costa, L. (Professor Associado), Fernandes, L. (Professor Auxiliar), Sottomayor, M. (Professor Auxiliar), Martins, N. (Professor Catedrático), Hernández-Marrero, P. (Investigador Auxiliar), Gonçalves, R. (Professor Associado), Ribeiro, R. (PI), Coelho, S. L. (Docente Assistente), Pereira, S. M. (Investigador Auxiliar), Silva, S. (Professor Associado), Rodrigues, V. (Professor Associado), Sotiros, D. G. (Investigador Auxiliar), Valverde, C. (Professor Auxiliar), Leitão, A. (Professor Auxiliar), Julião, J. (Professor Auxiliar), Tavares, M. (Professor Auxiliar), Lages, C. R. (Investigador Auxiliar), Elmashhara, M. G. (Investigador Auxiliar) & Teymourifar, A. (Investigador Auxiliar)
1/01/20 → 31/12/25
Projeto

Citação

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abstract = "We investigate the consequences of adopting a new accrual-based relief mechanism on private firms{\textquoteright} borrowing capacity. During the COVID-19 pandemic, the Italian government implemented a temporary change in accounting rules that allowed firms to suspend up to the entire amount of their depreciation and amortisation charges. Using a sample of Italian firms from 2018 to 2021 and a difference-in-differences model, we show that the depreciation and amortisation suspension policy (DASP) adopters, compared to non-adopters, access larger loans and negotiate a lower cost of debt than in the pre-DASP period. Our results are robust to additional tests for potential endogeneity and confounding factors such as earnings management and the adoption of other accounting-based relief mechanisms. We provide evidence that accrual-based relief mechanisms have real economic effects and are effective measures to support firms in managing a systemic shock.",

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author = "Mattei, \{Marco Maria\} and Matteo Merlo and Eleonora Monaco",

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T1 - The Italian depreciation suspension policy during the COVID-19 pandemic

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AU - Mattei, Marco Maria

AU - Merlo, Matteo

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PY - 2023

Y1 - 2023

N2 - We investigate the consequences of adopting a new accrual-based relief mechanism on private firms’ borrowing capacity. During the COVID-19 pandemic, the Italian government implemented a temporary change in accounting rules that allowed firms to suspend up to the entire amount of their depreciation and amortisation charges. Using a sample of Italian firms from 2018 to 2021 and a difference-in-differences model, we show that the depreciation and amortisation suspension policy (DASP) adopters, compared to non-adopters, access larger loans and negotiate a lower cost of debt than in the pre-DASP period. Our results are robust to additional tests for potential endogeneity and confounding factors such as earnings management and the adoption of other accounting-based relief mechanisms. We provide evidence that accrual-based relief mechanisms have real economic effects and are effective measures to support firms in managing a systemic shock.

AB - We investigate the consequences of adopting a new accrual-based relief mechanism on private firms’ borrowing capacity. During the COVID-19 pandemic, the Italian government implemented a temporary change in accounting rules that allowed firms to suspend up to the entire amount of their depreciation and amortisation charges. Using a sample of Italian firms from 2018 to 2021 and a difference-in-differences model, we show that the depreciation and amortisation suspension policy (DASP) adopters, compared to non-adopters, access larger loans and negotiate a lower cost of debt than in the pre-DASP period. Our results are robust to additional tests for potential endogeneity and confounding factors such as earnings management and the adoption of other accounting-based relief mechanisms. We provide evidence that accrual-based relief mechanisms have real economic effects and are effective measures to support firms in managing a systemic shock.

KW - COVID-19 relief mechanism

KW - Bank debt

KW - Cost of debt

KW - Depreciation policy

KW - Private firms

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DO - 10.1080/17449480.2023.2174444

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JO - Accounting in Europe

JF - Accounting in Europe

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ER -

The Italian depreciation suspension policy during the COVID-19 pandemic: consequences on private firms’ borrowing capacity

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