1. Contact details

Mahmoud Gad,m.gad1@lancaster.ac.uk

2. Course overview

During the summer term, you will participate in lectures and workshops designed to introduce you to the key literature and research methods on which the standard dissertation topic is based. Both  during  and  following  this  taught  component,  you  will  be  required  to  undertake independent research that (i) reviews the academic literature relating to your chosen topic and (ii) reports empirical evidence on the topic.

3. Key dates

11th July 2022: First draft of the dissertation submitted for comments

Week commencing (9th) August 2022: Return of the first draft of dissertation with comments.

12th  September 2022: Deadline to submit the final draft of the dissertation.

4. Course objectives

The primary objective of the taught element of AcF 702 is to prepare you for the standard dissertation topic on debt contracting. In particular, lectures and workshops aim to:

•   Introduce the theoretical literature on debt contracting. This material will provide the basis for the literature review section (Part 1) of the standard dissertation;

•   Introduce the concepts of data wrangling, data visualization, and statistical analysis. This material will provide the basis for the empirical analysis (Part 2)  of the dissertation;

•   Assist with the practical issues associated with producing a high-quality MSc dissertation, including dissertation content, structure, style, referencing rules, presentation of results, etc.

5. Learning outcomes

Following completion of the taught component ofAcF 702, you should:

1.    Understand the significance of debt in capital structure.

2.    Understand the key theories used in debt contracting literature as well as the main features of debt contracts and the role of financial covenants.

3.    Be able to understand, synthesize and critique key research papers.

4.    Possess a good working knowledge of using R for data analysis, data visualization, statistical methods, and programming required to undertake empirical research.

5.    Be able to understand and handle syndicated loan data.

6.    Be able to design and undertake large-sample empirical tests on the topics discussed.

6. Taught course structure

The course will consist of a series of sessions in the Summer Term. Sessions will comprise a mixture of lectures and online workshops.

The first few sessions of the course deal primarily with the theoretical and empirical literature on the topic. The material covered in these sessions will provide the basis for the literature review  section of the dissertation (Part  1). In some sessions, student groups will present assigned papers. The presentation time is 15-20 minutes. Later sessions cover practicalaspects of the standard dissertation including data wrangling/visualization skills (using R) and research methods as well as the dissertation structure, writing skills, and presentation of results.

7. Dissertation Synopsis

To many of you, identifying and refining research questions could be a significant hurdle in the dissertation writing process. To help you to manage this and other challenges, you are encouraged to prepare a one-page “Dissertation Synopsis” . It will summarise key aspects of your dissertation, including key literature, research questions, hypotheses, methodology, and a planned sequence of Tables/Figures.

The Dissertation Synopsis will help you in two major ways. First, it will help you to focus and structure not only your dissertation but also your dissertation writing process. Second, it will summarise the key aspects ofyour dissertation and therefore facilitate the process of discussing your ideas and problems with the course director.

You are strongly encouraged to contemplate research questions as early as possible and you should start working on the Dissertation Synopsis no later than Lecture 5.

You are welcome to discuss a draft of the Dissertation Synopsis.

8. Readings

A suggested list of readings for each session is provided below. Much of the reading material forthis course consists of articles published in academic journals. You should note, however, thatthese reading lists are not an exhaustive list of everything that you can or should read. In yourdissertation, you should ideally show that you have identified, read, and understood a wider selection of relevant literature than that covered in this course. You may be able to find articles published in academic journals using e-journal sites available via the university library

http://onesearch.lancaster.ac.uk/primo_library/libweb/action/search.do?mode=Basic&vid=L UL_VU1&tab=articles&.

R textbook:

https://r4ds.had.co.nz/

Useful e-journal sites are ABI/INFORM GLOBAL, Business Source Premier, ScienceDirect, JSTOR. Below are examples of important journals:

- The Accounting Review

- Journal of Accounting Research

- The Journal of Finance

- Journal of Accounting and Economics

- Journal of Financial Economics

- Review of Financial Studies

- Journal of Political Economy

Furthermore, Google Scholar (http://scholar.google.co.uk) is a powerful tool to search for academic articles. In addition to e-journal sites for published articles, you should also use the Social Sciences Research Network website (www.ssrn.com) to source relevant unpublished material. Browsing through the hard-copyjournals in the library is also a potentially fruitful way of identifying relevant literature.

Moodle (Teams):

Some course materials and links to useful websites (including financial databases) will be made available via Moodle (Teams). Materials will be available to students registered for the AcF 702 dissertation. You will need your university network username and password to access the site.

9-Lecture outline

The following section provides a detailed overview of the topics covered in each session, together with a selection of useful readings. Please remember that the readings provided here represent only a selection of the relevant material. One of the features of a good literature review (Part 1) will be evidence that you have independently sourced, read, and understood material not covered in class.

Lecture 1

In this session, I will introduce the course and key dates. In addition, we will discuss some practical tips on how to manage your time. We will also discuss your presentations.

We will then discuss the features of debt contracting and loan markets. An important piece of literature in accounting and finance examines the design of debt contracts and debt contract terms (e.g. loan price, maturity, collateral, etc.). In addition, prior research focuseson the determinants of syndicated loan structure (i.e. number of lenders and fraction of loans retained by each bank). We will focus, in this session, on the theoretical framework that explains variations in loan terms and syndicate structure.

Reading list

Katerina Simons,  1993. Why do banks syndicate loans?New England Economic Review, Federal Reserve Bank of Boston, 45-52.

Examples of empirical papers:

Costello, A., Wittenberg-Moerman, R. (2011) The impact of financial reporting quality on debt contracting:  evidence  from  internal  control weakness reports. Journal of Accounting Research 49 (1), 97– 136

Kim, J., Song, B. and Zhang, L. (2011) internal control weakness and bank loan contracting: Evidence from SOX section 404 disclosures. The Accounting Review, 86(4), pp. 1157-

1188.

Jeong-Bon Kim  and  Byron Y.  Song 2011. Auditor quality and loan  syndicate  structure. AUDITING: A Journal of Practice & Theory: 30 (4): 71-99.

Lecture 2

1-  Literature review and presentation

This session aims at providing a useful framework for evaluating research papers and thinking about designing research that will provide compelling evidence on any research question. In addition, these papers provide a guide on how to structure and to write a research dissertation.

Examples of literature review

Armstrong, C.S., Guay, W.R., Weber, J.P., 2010. The role of information and financial reporting in corporate governance and debt contracting. Journal of Accounting and Economics 50 (2/3), 179– 234. (Section 5 only).

Shivakumar, L. 2013. The  role  of financial  reporting  in  debt  contracting and stewardship,

Accounting and Business Research, 43(4), pp. 362–383.

Evaluation papers

Gordon,  T.  P.,  Porter,  J.  C.,  2009.  Reading  and  understandings  academic  research  in accounting: A guide for students. Global Perspective on Accounting Education 6, 25-45.

Evans III, J. H., M. Feng, V. B. Hoffman, D. V. Moser, and W. A. Van der Stede. 2015. Points to  consider  when  self-assessing  your  empirical  accounting  research.  Contemporary Accounting Research 32 (3):1162- 1192.

2- Introduction to R and tidyverse

In this session, I will introduce you to working with R. More specifically, we will cover      some basic R commands. Next, we will cover the grammar of data wrangling using R and the concept of tidy data. Finally, we will have a look at merging and appending data.

Reading list

McKinley  (2020) Introduction to R. Chapter 2 and Chapter 3

https://exeter-data-analytics.github.io/IntroToR/getting-started-in-r.html

https://exeter-data-analytics.github.io/IntroToR/fundamentals-of-r.html

Wickham, H., & Grolemund, G. (2020). R for data science: Import, tidy, transform, visualize, and model data. Chapter 5 and Chapter 7

https://r4ds.had.co.nz/transform.html

https://r4ds.had.co.nz/exploratory-data-analysis.html

Lecture 3

Data visualization

In this session, we will cover the grammar of data visualization. We live in a world with an increasing volume of data and it is almost impossible to tell a story without visualization data. We will focus on effective data visualization and the common mistakes in visualizing data.

Reading list

Wickham, H., & Grolemund, G. (2020). R for data science: Import, tidy, transform, visualize, and model data. Chapter 3

https://r4ds.had.co.nz/data-visualisation.html

https://rkabacoff.github.io/datavis/

Lecture 4

Regressions

In  this  session,  we  will  go  through  the  idea  of  conditional  distribution  and  regression assumptions. We will then discuss panel data structure, fixed effects regressions, and research design. Finally, we will briefly discuss causal inferences and the difference between correlation and causation.

Reading list

Huntington-Klein, N. (2022) the effect an introduction to research design and causality

https://theeffectbook.net/index.html

Group presentations of previously assigned researchpapers:

Dennis, S. A., and Mullineaux, D. J. (2000). Syndicated loans. Journal of Financial

Intermediation, 9, 404-426.

Lecture 5

Corporate misreporting: a case study

In the session, we will focus on the issue of misreporting and the response by banks. We will use data from Compustat and DealScan to study the effect of misreporting on loan terms.

Core reading:

Graham, J. R., S. Li, and J. Qiu. 2008. Corporate misreporting and bank loan contracting. Journal of Financial Economics 89 (1): 44–61.

Amiram, D., Bozanic, Z., Cox, J.D. et al. 2018. Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature. Review of Account Studies 23,

732–783

Dyck,A. Morse, A. and Zingales, L. 2021. How pervasive is corporate fraud? Available at: https://ssrn.com/abstract=2222608

https://www.ft.com/content/765fc482-68db-11e8-b6eb-4acfcfb08c11

https://www.ft.com/content/5823a7cc-4279-11e4-9818-00144feabdc0

Additional reading: Please read (A) Section 5 from Armstrong et al (2010) and (B) Shivakumr (2013)

Group presentations:

Graham, J. R., S. Li, and J. Qiu. 2008. Corporate misreporting and bank loan contracting. Journal of Financial Economics 89 (1): 44–61.