Reputation of underwriter,institutions,and earnings management of IPO is-suers
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    Abstract:

    Evidence from the developed capital markets shows that underwriter reputation can be used to re-strain the earning management of IPO companies. This restraining relationship is reexamined with the samples of IPO companies from 2001 to 2011 in China. A different result is found that underwriter reputation is ineffec-tive in restraining the earning management of IPO companies,and that the positive relationship between them is significant under the poor investor protection areas. Moreover,in order to get a higher underwriting fee,the higher-reputed underwriters may even help the IPO companies to gain a larger room in earning management.Obviously,in order for the mechanism of underwriter reputation to work effectively,China’s market needs to be better self-disciplined,and the legal risks needs to be raised against the opportunism behavior of the under-writers especially.

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  • Online: April 14,2018
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