Earnings Management, Managerial Optimism, and IPO Valuation

Autor:	Hsin-Yu Lin, Sue-Jane Chiang, Pei-Gi Shu
Rok vydání:	2012
Předmět:	Accrual Financial economics Face value media_common.quotation_subject Experimental and Cognitive Psychology Optimism Earnings management Market price Economics Initial public offering Finance Valuation (finance) Underwriting media_common
Zdroj:	Journal of Behavioral Finance. 13:147-161
ISSN:	1542-7579 1542-7560
DOI:	10.1080/15427560.2012.681331
Popis:	We postulate that both managerial overoptimism and earnings management using accruals to boost accounting numbers effect on initial public offering (IPO) valuation. Referring to Purnandam and Swaminathan [2004], we gauge the IPO intrinsic values with respect to the offer price and the initial price. The portion that real offer (initial) price is above the intrinsic offer (initial) price is defined as offer premium (overreaction). Using 287 Taiwan's IPOs in sampling period 2004–2008, we find that most IPO firms were overpriced rather than underpriced. The offer premium is neither affected by earnings management nor managerial optimism, which is probably due to the greater scrutiny by the associated underwriters who are less gullible to managerial optimism or earnings management. In contrast, in initial market price valuation investors are cautious to take the face value of earnings management when IPO managers are perceived of moderate optimism. However, investors directly discipline overoptimistic manager...
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::13e097f5b057733915c0687c3ce7dbf6 https://doi.org/10.1080/15427560.2012.681331 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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