Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors

• 成果类型: Article
• 署名作者: Katz, Sharon P.
• 署名单位: Harvard University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2009.84.3.623
• 发表日期: 2009
• 页码: 623-658
• 关键词: CORPORATE GOVERNANCE; Venture capitalists; management; performance; accruals; FIRMS; debt; Timeliness; DECISION; returns

摘要

This study explores how firms' ownership structures affect their earnings quality and long-term performance. Focusing on a unique sample of private firms for which there is financial data available in the years before and after their initial public offering (IPO), I differentiate between those that have private equity sponsorship (PE-backed firms) and those that do not (non-PE-backed firms). The findings indicate that PE-backed firms generally have higher earnings quality than those that do not have PE sponsorship, engage less in earnings management, and report more conservatively both before and after the IPO. Further, PE-backed firms that are majority-owned by PE sponsors exhibit superior long-term stock price performance after they go public. These results stem from the professional ownership, tighter monitoring, and reputational considerations exhibited by PE sponsors.