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The paper documents short-and long-run performance of initial public offerings on the Warsaw Stock Exchange from 1998 to 2008. The study reveals positive initial market-adjusted returns of 13.95 percent and significant long-term underperformance with mean of -22.62 percent for the three-year buy-and-hold strategy. We introduce ordinary least squares regressions to find determinants of initial returns. Our findings document strong explanatory power of early aftermarket volatility, issuer's size, growth opportunities, and profitability before the offering. Moreover, those variables that can partly explain differences in initial returns can also help to shed light on the long-term underperformance issue. Our results are thus consistent with Miller's (1977) divergence of opinion hypothesis.

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ARTICLES Agency costs of overvalued equity and earnings management in companies listed on WSE (Michał Kałdoński, Tomasz Jewartowski) Friends or foes? Activist hedge funds and other institutional investors (Andrew Carrothers) Board ethos and institutional work: developing a corporate governance identity through developing the uk code (Donald Nordberg)Governance and fi nancing of innovative very small business (VSB): evidence from a Canadian biotechnological fi rm (Alidou Ouedraogo) Corporate governance, risk and crises in small companies: shedding light from inside the boardroom black box (Leslie Spiers) Gender diversity impact on corporate social responsibility (CSR) and Greenhouse Gas emissions in the UK (Renata Konadu)Lessons university-based business schools should learn vicariously-rather than through experience-from university athletics (Edward W. Miles) Commercialization of the education of economists versus integrity of the university (Jan Szambelańczyk) Abstract: Th e aim of the paper is to study earnings management activities of companies listed on Warsaw Stock Exchange from the perspective of Jensen's agency theory of overvalued equity (Jensen, 2005). Specifi cally, we analyze relations between equity overvaluation and various types of earnings management used by public companies between 2005 and 2015. We provide evidence partially consistent with Jensen's theory. Specifi cally, our study reveals that overvaluation intensifi es income-increasing accrual earnings management activities. However, we also fi nd that overvaluation is not followed by real transactions management activities, as opposed to previous studies based on the US market. We provide some evidence that this diff erence might be driven by external monitoring executed by large institutional investors.