The Impact of Implementing the New Leasing Standards on Enterprises Financing Decisions

Abstract

This study aims to investigate the impact of the new lease accounting standards CAS21 on enterprises' financing decisions. This paper uses a multiple-time-point difference-in-difference (DID) model to conduct research. The findings indicate that changes in lease accounting standards are likely to change the financing decisions of enterprises and reduce their financing efficiency. The reduction in financing efficiency is mainly manifested in the increase in the aggressive debt behavior of enterprises. The reduction in enterprise financing efficiency varies significantly among leasing scales in different industries, enterprises of different ownership structures and different ages. The new lease standards reduce the financing efficiency by increasing financial leverage ratios.