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Earning management in Malaysian IPOs: The East Asian crisis, ownership control, and post-IPO performance


Ahmad Zaluki, Nurwati Ashikkin and Campbell, Kevin and Goodacre, Alan (2011) Earning management in Malaysian IPOs: The East Asian crisis, ownership control, and post-IPO performance. The International Journal of Accounting, 46 (2). pp. 111-137. ISSN 00207063

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Abstract

We find evidence of income-increasing earnings management in Malaysian IPOs, which occurs primarily for IPOs during a period of severe economic stress (the East Asian crisis). Within the high-ownership-concentration Malaysian market, post-IPO control concerns also appear to constrain IPO earnings management: owners seem willing to accept reduced IPO proceeds and signaling opportunities to increase the likelihood of retaining control of the company post-IPO. The requirement to provide a profit guarantee does not seem to greatly affect earnings management.IPO companies engaging in aggressive income-increasing earnings management have significantly worse market-based performance than their more conservative counterparts, but again only for IPOs issued during the economic crisis period. Overall, the results suggest that personal liquidity concerns are an important factor in IPO decisions during the economic crisis.

Item Type: Article
Uncontrolled Keywords: Initial public offerings; Earnings management; Ownership structure; Long-run stock market performance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Othman Yeop Abdullah Graduate School of Business
Depositing User: Dr. Nurwati Ashikkin Ahmad Zaluki
Date Deposited: 25 Apr 2013 06:37
Last Modified: 24 Apr 2016 00:44
URI: http://repo.uum.edu.my/id/eprint/5118

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