Earnings quality and international IPO underpricing

Accounting Review

Volumn 86, Issue 2, 2011, Pages 483-505

  Boulton, Thomas J ^a   Smart, Scott B ^b   Zutter, Chad J ^c  

^a MIAMI UNIVERSITY   (United States)

^b INDIANA UNIVERSITY   (United States)

^c UNIVERSITY OF PITTSBURGH   (United States)

Author keywords

Earnings quality; Initial public offerings; International finance; Underpricing

Indexed keywords

EID: 79955589139     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.00000018     Document Type: Article

References (60)

1. Aharony, J., C. Lin, and M. P. Loeb. 1993. Initial public offerings, accounting choices, and earnings management. Contemporary Accounting Research 10 (1): 61-81.
2. -, C. J. Lee, and T. J. Wong. 2000. Financial packaging of IPO firms in China. Journal of Accounting Research 38 (1): 103-126.
3. Allen, F., and G. R. Faulhaber. 1989. Signaling by underpricing in the IPO market. Journal of Financial Economics 23 (2): 303-323.
4. -, J. Qian, and M. Qian. 2005. Law, finance, and economic growth in China. Journal of Financial Economics 77 (1): 57-116. (Pubitemid 40829504)
5. Ball, R., A. Robin, and J. S. Wu. 2003. Incentives versus standards: Properties of accounting income in four East Asian countries. Journal of Accounting and Economics 36 (1-3): 235-270. (Pubitemid 38161320)
6. -, and L. Shivakumar. 2005. Earnings quality in U.K. private firms. Journal of Accounting and Economics 39 (1): 83-128.
7. -, and-. 2008. Earnings quality at initial public offerings. Journal of Accounting and Economics 45 (2-3): 324-349.
8. Baron, D. P. 1982. A model of the demand for investment banking advising and distribution services for new issues. The Journal of Finance 37 (4): 955-976.
9. Barry, C. B., C. J. Muscarella, J. Peavy, III, and M. R. Vetsuypens. 1990. The role of venture capital in the creation of public companies: Evidence from the going-public process. Journal of Financial Economics 27 (2): 447-472.
10. Beck, T., A. Demirgüç-Kunt, and R. Levine. 2000. A new database on financial development and structure. The World Bank Economic Review 14 (September): 597-605. (Pubitemid 32200978)
11. Benveniste, L. M., and P. A. Spindt. 1989. How investment bankers determine the offer price and allocation of new issues. Journal of Financial Economics 24 (2): 343-361.
12. Bhattacharya, U., H. Daouk, and M. Welker. 2003. The world price of earnings opacity. The Accounting Review 78 (3): 641-678. (Pubitemid 36989974)
13. Biddle, G., and G. Hilary. 2006. Accounting quality and firm-level capital investments. The Accounting Review 81 (5): 963-982. (Pubitemid 44825411)
14. Boulton, T. J., S. B. Smart, and C. J. Zutter. 2010. IPO underpricing and international corporate governance. Journal of International Business Studies 41 (February/March): 206-222.
15. Bradley, D. J., J. W. Cooney, Jr., B. J. Jordan, and A. K. Singh. 2004. Negotiation and the IPO offer price: A comparison of integer vs. non-integer IPOs. Journal of Financial and Quantitative Analysis 39 (3): 517-539.
16. Bushman, R. M., and J. D. Piotroski. 2006. Financial reporting incentives for conservative accounting: The influence of legal and political institutions. Journal of Accounting and Economics 42 (1-2): 107-148. (Pubitemid 44184755)
17. Carter, R. B., and S. Manaster. 1990. Initial public offerings and underwriter reputation. The Journal of Finance 45 (4): 1045-1067.
18. Clarkson, P. M., A. Dontoh, G. Richardson, and S. E. Sefcik. 1992. The voluntary inclusion of earnings forecasts in IPO prospectuses. Contemporary Accounting Research 8 (2): 601-616.
19. Coffee, J. C., Jr. 1999. The future as history: The prospects for global convergence in corporate governance and its implications. Northwestern University Law Review 93 (3): 641-708.
20. -2002. Racing towards the top? The impact of cross-listings and stock market competition on international corporate governance. Columbia Law Review 102 (7): 1757-1831.
21. DeFond, M., M. Hung, and R. Trezevant. 2007. Investor protection and the information content of annual earnings announcements: International evidence. Journal of Accounting and Economics 43 (1): 37-67.
22. Degeorge, F., J. Patel, and R. J. Zeckhauser. 1999. Earnings management to exceed thresholds. The Journal of Business 72 (1): 1-33.
23. Doidge, C., G. A. Karolyi, and R. M. Stulz. 2007. Why do countries matter so much for corporate governance? Journal of Financial Economics 86 (1): 1-39.
24. DuCharme, L. L., P. H. Malatesta, and S. E. Sefcik. 2001. Earnings management: IPO valuation and subsequent performance. Journal of Accounting, Auditing & Finance 16 (4): 369-396.
25. Dyck, A., and L. Zingales. 2004. Private benefits of control: An international comparison. The Journal of Finance 59 (2): 537-600. (Pubitemid 38483889)
26. Ellul, A., and M. Pagano. 2006. IPO underpricing and after-market liquidity. Review of Financial Studies 19 (2): 381-421. (Pubitemid 43551203)
27. Fan, Q. 2007. Earnings management and ownership retention for initial public offering firms: Theory and evidence. The Accounting Review 82 (1): 27-64.
28. Friedlan, J. M. 1994. Accounting choices of issuers of initial public offerings. Contemporary Accounting Research 11 (1): 1-31.
29. Gelos, R. G., and S. Wei. 2005. Transparency and international portfolio holdings. The Journal of Finance 60 (6): 2987-3020. (Pubitemid 41706369)
30. Gow, I., G. Ormazabal, and D. J. Taylor. 2010. Correcting for cross-sectional and time-series dependence in accounting research. The Accounting Review 85 (2): 483-512.
31. Grinblatt, M., and C. Y. Hwang. 1989. Signaling and the pricing of new issues. The Journal of Finance 44 (2): 393-420.
32. Hung, M. 2000. Accounting standards and value relevance of financial statements: An international analysis. Journal of Accounting and Economics 30 (3): 401-420.
33. Jagannathan, R., and A. Sherman. 2006. Why do IPO auctions fail? Working Paper No. 12151. Cambridge, MA: NBER.
34. 2 around the world: New theory and new tests. Journal of Financial Economics 79 (2): 257-292.
35. Jog, V., and B. McConomy. 2003. Voluntary disclosure of management earnings forecasts in IPO prospectuses. Journal of Business Finance & Accounting 30 (1-2): 125-168. (Pubitemid 36408514)
36. La Porta, R., F. Lopez-De-Silanes, A. Shleifer, and R. Vishny. 1998. Law and finance. The Journal of Political Economy 106 (December): 1113-1155. (Pubitemid 29181957)
37. -,-,-, and-. 2000. Investor protection and corporate governance. Journal of Financial Economics 58 (1-2): 3-27.
38. Leone, A. J., S. Rock, and M. Willenborg. 2007. Disclosure of intended use of proceeds and underpricing. Journal of Accounting Research 45 (March): 111-153.
39. Leuz, C., D. Nanda, and P. D. Wysocki. 2003. Earnings management and investor protection: An international comparison. Journal of Financial Economics 69 (3): 505-527. (Pubitemid 37007092)
40. Ljungqvist, A. P. 2007. IPO underpricing. In Handbook of Corporate Finance, Volume 1: Empirical Corporate Finance, edited by E. Eckbo, 375-422. New York, NY: Elsevier/North Holland.
41. -, T. Jenkinson, and W. J. Wilhelm, Jr. 2003. Global integration in primary equity markets: The role of U.S. banks and U.S. investors. Review of Financial Studies 16 (1): 63-99. (Pubitemid 37496160)
42. Loughran, T., J. R. Ritter, and K. Rydqvist. 1994. Initial public offerings: International insights. Pacific Basin Journal 2 (2-3): 165-199.
43. -, and-. 2004. Why has IPO underpricing changed over time? Financial Management 33 (Autumn): 5-37.
44. Megginson, W. L., and K. A. Weiss. 1991. Venture capitalist certification in initial public offerings. The Journal of Finance 46 (3): 879-903.
45. Moeller, S. B., and F. P. Schlingemann. 2005. Global diversification and bidder gains: A comparison between cross-border and domestic acquisitions. Journal of Banking & Finance 29 (March): 533-564. (Pubitemid 40083455)
46. Prezas, A. P., M. Tarimcilar, and G. K. Vasudevan. 2000. The pricing of equity carve-outs. Financial Review 35 (4): 123-138.
47. Ritter, J. R. 1984. The hot issue market of 1980. The Journal of Business 57 (2): 215-240.
48. -1987. The costs of going public. Journal of Financial Economics 19 (2): 269-281.
49. -1991. The long-run performance of initial public offerings. The Journal of Finance 46 (1): 3-27.
50. Rock, K. 1986. Why new issues are underpriced. Journal of Financial Economics 15 (1-2): 187-212.
51. Ruud, J. S. 1993. Underwriter price support and the IPO underpricing puzzle. Journal of Financial Economics 34 (2): 135-151.
52. Schipper, K., and A. Smith. 1986. A comparison of equity carve-outs and seasoned equity offerings: Share price effects and corporate restructuring. Journal of Financial Economics 15 (1-2): 153-186.
53. Schrand, C., and R. E. Verrecchia. 2005. Information disclosure and adverse selection explanations for IPO underpricing. Working paper, University of Pennsylvania.
54. Sherman, A. E. 2005. Global trends in IPO methods: Book building versus auctions with endogenous entry. Journal of Financial Economics 78 (3): 615-649. (Pubitemid 41662898)
55. Teoh, S. H., I. Welch, and T. J. Wong. 1998a. Earnings management and the long-run market performance of initial public offerings. The Journal of Finance 53 (6): 1935-1974.
56. -, T. J. Wong, and G. R. Rao. 1998b. Are accruals during initial public offerings opportunistic? Review of Accounting Studies 3 (1-2): 175-208.
57. -, and-. 2002. Why new issues and high-accrual firms underperform: The role of analysts' credulity. Review of Financial Studies 15 (3): 869-900.
58. Venkataraman, R., J. P. Weber, and M. Willenborg. 2008. Litigation risk, audit quality, and audit fees: Evidence from initial public offerings. The Accounting Review 83 (5): 1315-1345.
59. Welch, I. 1989. Seasoned offerings, imitation costs, and the underpricing of initial public offerings. The Journal of Finance 44 (2): 421-449.
60. Willenborg, M., and J. C. McKeown. 2001. Going-concern initial public offerings. Journal of Accounting and Economics 30 (December): 279-313.