Earnings management and IPO anomalies in China

摘要: This paper empirically examines the impact of earnings management and investor sentiment on IPO anomalies using a sample 506 Chinese IPOs issued over 1998–2003 period. We develop parsimonious pricing model in which both offer price short-term aftermarket are influenced by use management, show that can be below fair while equilibrium overvalued due to sentiment. Consistent with overreaction hypothesis, empirical results reveal positive relation between initial return managed accruals negative long-term stock performance return. Earnings appears generate pattern where following an tends inflated secondary market but adjusts its fundamental level long run. These findings robust across variety test specifications.