Buchner, A, Mohamed, A and Saadouni, B (2017) The association between earnings forecast in IPOs prospectuses and earnings management: An empirical analysis. Journal of International Financial Markets, Institutions and Money, 51. pp. 92-105. ISSN 1042-4431
Abstract
This paper examines the level of earnings management for large IPOs that provide earnings forecasts and those that do not provide forecasts in the IPO prospectus. Using a sample f 368 IPO firms listed on the London Stock Exchange between 1985 and 2012, we find that the level of earnings management is lower for IPOs that provided earnings forecasts, than for those which did not provide a forecast. This evidence is robust, controlling for endogeneity and sample selection. Further tests reveal that IPOs that provide forecasts outperform their counterparts in the long run, using various long term performance measures. Overall, our results suggest that earnings forecasts at the time of listing convey useful information to investors on the quality of the company listing in the market.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2017 Elsevier B.V. This is an author produced version of a paper published in Journal of International Financial Markets, Institutions and Money. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Initial public offerings; Earnings forecast; Earnings management; Long-run performance |
Dates: |
|
Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 21 Jun 2019 09:10 |
Last Modified: | 03 Jul 2019 01:11 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.intfin.2017.08.008 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:147575 |
Download
Filename: The association between earnings forecast in IPO prospectuses and earnings management.pdf
Licence: CC-BY-NC-ND 4.0