Earnings management and long-run stock performance following private equity placements
| Autor: | Feng Ying Liu, De Wai Chou, Michael J. Gombola |
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| Rok vydání: | 2009 |
| Předmět: |
Finance
Earnings response coefficient Equity risk Earnings Accrual business.industry Private equity secondary market Equity (finance) Private equity firm Monetary economics General Business Management and Accounting Club deal Private equity fund Private equity Earnings management Return on equity Accounting Predictive power Demographic economics Business Initial public offering Stock (geology) |
| Zdroj: | Review of Quantitative Finance and Accounting. 34:225-245 |
| ISSN: | 1573-7179 0924-865X |
| DOI: | 10.1007/s11156-009-0129-8 |
| Popis: | Previous studies suggest that investor optimism, fueled by earnings management, contributes to long-run underperformance following IPOs and SEOs. We investigate whether, like public issues of equity, managers of firms issuing equity privately manage earnings upward and whether the earnings management explanation for long-run stock performance of public issues also holds for private issues. Our main findings are: (1) little evidence of earnings being managed upward around the issue of private equity, and (2) little predictive power of abnormal accruals for long-run stock performance following private equity issues. These results suggest that earnings management is not responsible for investor optimism, if any, for firms issuing equity privately. Our results are robust to two alternative measures of earnings management and three measures of abnormal returns estimated over two sample periods. Unlike previous research, we find little evidence of underperformance following private issues of equity, when more recent years are included. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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