SYNOPSIS We examine whether firms with low accounting quality are more likely to use trade credit as a source of financing. Because of their advantages in overcoming information frictions, suppliers are more likely to provide trade credit to customers with low accounting quality. We therefore expect firms' use of trade credit to decrease with their accounting quality. We find results consistent with this prediction. We also find that this negative relation is more pronounced for customers with low inventory liquidation costs and high firm-wide information asymmetry. Our findings extend the literature linking firms' accounting quality to financial decisions. JEL Classifications: G32; M41

We use China as a laboratory to test the effect of government quality on cash holdings. We build on, and extend, the existing literature on government expropriation and its interaction with firm-level agency problems by proposing a financial constraint mitigation argument. We find that firms hold less cash when local government quality is high, which is not consistent with the state expropriation argument, but supports the financial constraint mitigation argument. A good government lowers the investment sensitivity to cash flows and cash sensitivity to cash flows, decreases cash holdings more significantly in private firms, and improves access to bank and trade credit financing. We also test and find support for Stulz's (2005) model on the interaction between government and firm agency problems.

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We present evidence that the desire to gain human capital is an important motive for corporate acquisitions. Our tests exploit the staggered recognition of the Inevitable Disclosure Doctrine (IDD) by U.S. state courts, which prevents employees with trade secret knowledge from working for other firms. We find a significant increase in the likelihood of being acquired for firms headquartered in states that recognize such a doctrine relative to firms headquartered in states that do not. Our result is stronger for firms with greater human capital and for firms whose employees have better ex ante employment mobility. We show that the IDD is positively associated with the retention of target firms’ key technicians, employees, and top executives after an acquisition. We also show that the IDD is positively associated with synergy creation, acquirers’ announcement returns, and acquirers’ long-run stock and operating performance. Overall, our result indicates that corporate acquisitions can be used as a means for firms to overcome labor market frictions and gain access to valuable human capital. This paper was accepted by David Simchi-Levi, finance.

The function of Islamic banks is not only to eliminate the interest system in its operational system, but also take a role to improve social welfare. Islamic banks have programs that can be used in the context of eradicating poverty, it is interest-free loans (qardhul hasan). Interest-free loan financing (qardhul hasan) is a social loan which is provided free of charge without any charges except returning its capital. This study is intended to examine how the implementation of interest-free loans (qardhul hasan) by Islamic bank and to know the extent of which the financing of interest-free loans (qardhul hasan) can alleviate poverty in the society. This research is none of doctrinal research. The research location is in Islamic bank in Surakarta. The output of this research is publication on national journal.The financing of Al-qardhul hasan itself has not got attention from Islamic bank as the realization of the social function of Islamic banking. Islamic banking products are more oriented to the the programs which contains the value of profit / profit so that interest-free loans (Al-qardhul Hasan) has not taken yet as a role in efforts to alleviate poverty.