학회소식
[2004년 제 2차] Underwriter Choice and Earnings Management of Firms
작성자 : 관리자
조회수 : 891
게시일 :
2004-05-25
Using a sample of seasoned equity offerings (SEOs), we examine the relationship between underwriter reputation and earnings management and its impact on the post-issue performance of SEOs. We argue that prestigious underwriters help reduce information asymmetry, thereby restricting the incentive for earnings management, and therefore, reducing the underperformance of post-issue SEOs. Consistent with these conjectures, this study finds evidence that the managerial choice of a prestigious underwriter not only reduces management’s incentive for earnings management, but also has a positive influence on the post-issue performance of SEOs. However, the affirmative influence of underwriter reputation is not long lasting. In addition, the managerial choice of a high quality underwriter is positively influenced by the existence of valuable information, such as R&D.
