Information uncertainty, earnings management, and long-run stock performance following initial public offerings

• Localización: Journal of Business Finance & Accounting, ISSN-e 1468-5957, Vol. 40, Nº. 9-10 (issue 9-10), 2013, págs. 1126-1154
• Idioma: inglés
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• Resumen

  • We examine how information uncertainty surrounding IPO (initial public offering) firms influences earnings management and long-run stock performance. For low-information-uncertainty issuers, at-issue earnings� management is positively related to subsequent unmanaged earnings and has no relationship to market reaction to earnings announcement and long-run stock performance following the offering. For high-information-uncertainty issuers, however, at-issue earnings� management is unrelated to subsequent unmanaged earnings and negatively related to market reaction to earnings announcement and long-run stock performance following the offer. The evidence suggests that, on average, managers in low-information-uncertainty firms tend to engage in earnings� management for informative purposes, while managers in high-information-uncertainty firms engage in earnings� management for opportunistic purposes.