Prospectus forecast publication and forecast errors: the role of venture capitalist certification

Autor:	David B. Citron, Xavier Gerard, Robert Cressy
Rok vydání:	2009
Předmět:	Selection bias business.industry media_common.quotation_subject Accounting Certification Venture capital Test (assessment) Earnings management Prospectus Business Business and International Management Initial public offering Finance Reputation media_common
Zdroj:	Venture Capital. 11:87-105
ISSN:	1464-5343 1369-1066
DOI:	10.1080/13691060802525296
Popis:	Using a dataset of French IPOs over the period 1996–2000 we provide a test of the certification ability of venture capitalists (VCs). We do this in two ways. First we compare forecast publication between VC- and non-VC-backed IPOs. Secondly, conditional on publication, we investigate the accuracy of VC-backed versus non-VC-backed IPOs' prospectus forecasts. We also test for the association between VC reputation and both forecast issuance and forecast accuracy. VC concerns for reputation should result in lower chances of issuing a forecast and in more accurate forecasts for VC-backed IPOs. Our main findings are that (i) the prospectuses of IPOs backed by VCs are indeed less likely to include financial forecasts; (ii) high-reputation VC backers are associated with lower forecast errors. These findings are consistent with the Certification Hypothesis and are robust to controlling for both sample selection bias, due to the discretionary nature of prospectus forecast issuance, and for earnings management pract...
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::eb0a2bc2ee59808a6968cf44d3bfe715 https://doi.org/10.1080/13691060802525296 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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