The Interaction between Institutional Investor Beliefs and Earnings Management during IPOs
In this paper, we exam firm‘s incentive to manage earnings raising external capital varies with investor beliefs. Under the spline specification regression: a firm is more likely to management earnings when investors are more optimistic about the industry prospects, but more reluctant when investor belief is low. We evaluate monitory cost to explore the reasons and find that using venture capitalists as specialized investors with lower monitoring costs than other institutional investors, earnings management is less likely for low investor beliefs but more likely for high investor beliefs for VC-backed firms relative to non-VC-backed firms. We can also obtain the same results as former study that auditor‘s quality negatively related with earnings management.
Earnings Management Institutional Investor Beliefs IPOs
NAN Xiaoli LIU Jingjian TANG Kaidun SHANG Jialei
School of Economic Dalian University of Technology, Dalian, China, 116024 School of Computer Science and Technology, School of Mathematical Science,Dalian University of Techn School of Computer Science and Technology, School of Mathematical Science, Dalian University of Tech
国际会议
大连
英文
623-631
2012-07-07（万方平台首次上网日期，不代表论文的发表时间）