Cooking the books around initial public offerings
A study about the pervasiveness of earnings management and investor protection regulations
Most prior studies suggest that firms opportunistically increase their earnings around an initial public offering (IPO). With a sample of 512 IPOs in 24 countries worldwide I find that IPO firms that are under suspicion of such behaviour, represent only a small proportion (+/-10%) of the total sample. My findings challenge the opportunistic perspective on earnings management and suggest that the information perspective is more pronounced. Furthermore, I find no evidence for a positive relationship between low investor protection regulations and opportunistic earnings management. It seems that stronger enforcement of investor protection laws do not counter self-interested behaviour.
|accountability, earnings, initial public offering|
|Erasmus University Rotterdam|
|Organisation||Erasmus School of Economics|
Seger, J. (2009). Cooking the books around initial public offerings. Erasmus University Rotterdam. Retrieved from http://hdl.handle.net/1765/15571