Do institutional investors reinforce or reduce agency problems? Earnings management and the post-IPO performance

Lo, Huai‐Chun; Wu, Ruei‐Shian; Kweh, Qian Long

doi:10.1016/j.irfa.2017.04.004

Cited by 40 publications

(24 citation statements)

References 69 publications

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“…Also, it will produce optimal performance for the company,to assess the external stakeholders. The results of this study are in accordance with the research [34], [4], [40], and [41].but not support the results of the study [42] and [43].…”

Section: Discussioncontrasting

confidence: 71%

Board Of Commissioners, Audit Committee Gender, Institutional Ownership and Earnings Management

Kusumaningtyas¹,

Chariri²,

Yuyetta³

2019

Proceedings of the 5th International Conference on Accounting and Finance (ICAF 2019)

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This study aimed to investigate the effect of the board of commissioners, audit committee gender, and institutional ownership on earnings management. The sample in this study were 28 mining companies of total 140 listed on the Indonesia Stock Exchange (IDX) between 2012-2016. Multiple linear regression analysis was used to test the hypothesis of this study. The hypothesis testing indicated that board of commissioners and institutional ownership had a significant and negative influence on earnings management. While the audit committee gender does not affect earnings management.

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Section: Discussioncontrasting

confidence: 71%

Board Of Commissioners, Audit Committee Gender, Institutional Ownership and Earnings Management

Kusumaningtyas¹,

Chariri²,

Yuyetta³

2019

Proceedings of the 5th International Conference on Accounting and Finance (ICAF 2019)

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“…Earnings management is an unethical accounting method that employs manipulative techniques to mislead stakeholders and any related parties by altering financial statements to cover the substandard performance of the firm (Burgstahler & Eames, 2003; Dechow, Myers, & Shakespeare, 2010). This unethical practice is also utilized by managers to influence the outcomes on contracts, raising capital and to gain managerial incentives by meeting or surpassing financial targets (Cheng, Lee, & Shevlin, 2015; Lo, Wu, & Kweh, 2017). Therefore, earnings management, in essence, is the manipulation of accruals to meet a predetermined target.…”

Section: Background Literature Review and Hypothesismentioning

confidence: 99%

The role of directors with multiple board seats and earnings quality: A Singapore context

Chee

Tham

2020

J Corp Accounting Finance

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This article explores whether multiple directorships has an influence on earnings management for Singaporean publicly listed firms. This article attempts to determine whether boards with multiple directorships are effective monitors and able deterrents of earnings management activities. Drawing on resource dependence theory, the results suggest that directors with multiple board seats will be able to tap on external resources for information, skills, and financial resources using their board connectedness. Data analysis is based on publicly listed firms on Singapore Stock Exchange (SSE) with a final pooled sample of 1,404 firm‐year observations from 2015 to 2018. Findings of this study show that with a higher level of multiple directorships, there is a significant negative relationship with the level of earnings management, where earnings management is measured by Dechow et al. (The Accounting Review, 1995, 70, 193–225) Modified Jones model and the Kothari et al. (Journal of Accounting and Economics, 2005, 39, 163–197) performance‐adjusted model. We also find that firms in Singapore that have a higher number of multiple directorships on its board, will have a lower level of tolerance on income‐increasing earnings manipulation. Notable secondary findings of this study include a significant negative relationship between the proportion of female directors on the board with the level of earnings management (income‐increasing manipulations). Additionally, it is found that the engagement of Big Four auditors has no significant relationship with the level of earnings management in the context of Singaporean firms. This study has significant implications and contributions to the theoretical applications and policy reforms, specifically pertaining to the Singapore Code of Corporate Governance on the issue of multiple directorships.

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“…Highlighting the monitoring role of institutional investors, Chun Lo et al (2017) found a superior post-IPO performance for IPOs with high institutional ownership. Studies show that the involvement of strategic cornerstone investors in the IPO process increases the firm's survival chances in the post-listing period (Espenlaub et al, 2016).…”

Section: Evidence Frommentioning

confidence: 99%

Do anchor investors affect long run performance? Evidence from Indian IPO markets

Kumar

Sahoo

2021

PAR

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Purpose Anchor investor (AI) regulation was introduced in 2009 by the Indian market regulator Securities and Exchange Board of India to facilitate the price discovery process during the book-building mechanism. This study aims to examine the aftermarket pricing performance of initial public offering (IPO) firms over the long-run period of up to 36 months after the listing date in the anchor investor regime. Design/methodology/approach The post-issue performance of 129 Indian IPOs issued from 2009 to 2014 is studied by using buy and hold abnormal returns, cumulative abnormal returns and wealth relatives approaches. This study presents the aftermarket performance indicators of Indian IPOs along with the comparative analysis between anchor-backed and non-anchor-backed IPO categories. Using multiple regression analysis, this study identifies the firm-level variables and issue characteristics that can explain long-term IPO performance. Findings This study reports that Indian IPOs continue to underperform in the long run in the anchor regulation era as well. However, anchor-backed IPOs are reported to underperform lesser than the IPOs not backed by anchor investment. Additionally, this study documents that the variables, i.e. offer size, grade, post-issue promoter holding and IPOs issued during hot IPO periods, are significant in explaining the 36-month aftermarket performance. Originality/value This study investigates the long-run aftermarket pricing performance of anchor affiliated IPOs in the Indian market context. Thus, it contributes to the limited primary markets’ research from emerging economies. Further, the results provide fresh evidence reaffirming the credibility of AI as an institutional investor for attestation of quality of the issues.

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Do institutional investors reinforce or reduce agency problems? Earnings management and the post-IPO performance

Cited by 40 publications

References 69 publications

Board Of Commissioners, Audit Committee Gender, Institutional Ownership and Earnings Management

Board Of Commissioners, Audit Committee Gender, Institutional Ownership and Earnings Management

The role of directors with multiple board seats and earnings quality: A Singapore context

Do anchor investors affect long run performance? Evidence from Indian IPO markets

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