Earnings management and the long-run market performance of initial public offerings

• 成果类型: Article
• 署名作者: Teoh, SH; Welch, I; Wong, TJ
• 署名单位: University of Michigan System; University of Michigan; University of California System; University of California Los Angeles; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00079
• 发表日期: 1998
• 页码: 1935-1974
• 关键词: OPERATING PERFORMANCE; stock returns; companies; RISK

摘要

Issuers of initial public offerings (IPOs) can report earnings in excess of cash flows by taking positive accruals. This paper provides evidence that issuers with unusually high accruals in the IPO year experience poor stock return performance in the three years thereafter. IPO issuers in the most aggressive quartile of earnings managers have a three-year aftermarket stock return of approximately 20 percent less than IPO issuers in the most conservative quartile. They also issue about 20 percent fewer seasoned equity offerings. These differences are statistically and economically significant in a variety of specifications.