scholarly journals IPO’s Long-Run Performance: Hot Market versus Earnings Management

2021 ◽  
Vol 14 (3) ◽  
pp. 132
Author(s):  
Tsai-Yin Lin ◽  
Jerry Yu ◽  
Chia-Yi Lin
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Explanatory Power ◽  
Market Condition ◽  
Relative Importance ◽  
Long Run ◽  
Hot Market

One of the IPO-related anomalies that have been well-discussed in the finance literature is the IPO’s long-running underperformance. Two of the major explanations of that phenomenon are: “Hot market” and earnings management. This study investigates the relative importance of these two explanations to the IPO’s long-run underperformance. Our results show that although both hot market and earnings management play a role in explaining IPO’s long-run performance in their own rights, earnings management no longer exhibits significant explanatory power when the IPOs are issued in the cold market. While the IPOs that are issued in the hot market still tend to underperform in the long run even if the firms do not engage in earnings management. Our findings are consistent with the literature related to the information asymmetry in IPO market. And, because the information asymmetry is more severe in hot market condition, IPOs issued in hot market tend to exhibit poorer returns than those issued in cold market.

A NOTE ON INFLATION, ECONOMIC GROWTH, AND INCOME INEQUALITY

2009 ◽  
Vol 13 (1) ◽  
pp. 138-147 ◽  
Author(s):  
Yi Jin
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Income Inequality ◽  
Endogenous Growth ◽  
Money Growth ◽  
Relative Importance ◽  
Long Run ◽  
Endogenous Growth Model ◽  
The Relationship ◽  
Negative Growth

This paper develops a monetary endogenous growth model with capital and skill heterogeneity to analyze the relationship among inflation, growth, and income inequality. In the model inflation, growth, and inequality are jointly determined. We show that an increase in the long-run money growth rate raises inflation and reduces growth, but its effect on income inequality depends on the relative importance of the two types of heterogeneity. Inequality shrinks with the rise of inflation when capital heterogeneity dominates and enlarges when skill heterogeneity dominates. Therefore, our model supports a negative (positive) inflation–inequality relationship and a positive (negative) growth–inequality relationship when capital (skill) heterogeneity dominates. In any event, inflation and growth are negatively related.

scholarly journals The Relative Importance of Health Care and Social Services for Population Health: A Time Series Investigation

2019 ◽  
Vol 11 (10) ◽  
pp. 93
Author(s):  
Benjamin Yawney ◽  
Akhter Faroque
Keyword(s):  
Health Care ◽  
Time Series ◽  
Population Health ◽  
Social Services ◽  
Health Indicators ◽  
Relative Importance ◽  
Vector Error Correction ◽  
Long Run ◽  
Short Run ◽  
Vector Error Correction Models

We study the relative importance of government health care and social services spending in the short, medium and long run across vector error correction models for six population health indicators. Each model takes into account the key time series properties of the health input and output data and also controls for the broader socio-economic, demographic, life-style and environmental determinants of health. The evidence shows that both types of spending contribute significantly to extending life expectancy and lowering mortality. However, the relative contributions of health care spending are bigger in the short run, while those of social services spending are bigger in the medium and the long run. Any policy of re-allocation of resources from health care to social services must take this trade-off into account.

Accruals, Managerial Operating Decisions, and Firm Growth: Implications for Tests of Earnings Management

2018 ◽  
Vol 31 (1) ◽  
pp. 153-193 ◽  
Author(s):  
Michelle Liu
Keyword(s):  
Growth Factor ◽  
Earnings Management ◽  
Firm Growth ◽  
Type I Error ◽  
Explanatory Power ◽  
Error Rates ◽  
Type I ◽  
Operating Cycle ◽  
Nonlinear Growth ◽  
Asset Growth

ABSTRACT One of the most crucial yet controversial issues in executive performance evaluation is disentangling which managerial decisions reflect firms' economic position versus opportunistic earnings management. I explore this issue and find that specific managerial policies often used by growing firms are likely to be identified as upward earnings management by widely used annual accrual expectation models. I find that incorporating linear and nonlinear growth measures (for various assets and a growth factor) into these models increases the explanatory power by 1.01 percent to 9.86 percent. Models with asset growth, receivables growth, and a growth factor generate the lowest Type I error rates, while models with asset growth, operating cycle, and a growth factor generate the lowest Type II error rates. In reexamined tests of upward earnings management around IPOs, inferences change after controlling for growth. I make empirical suggestions to help distinguish growth from opportunism in tests of earnings management.

scholarly journals Agro-industrialisation and financial intermediation in Nigeria

2020 ◽  
Vol 11 (3) ◽  
pp. 443-456 ◽  
Author(s):  
Ngozi Adeleye ◽  
Evans Osabuohien ◽  
Simplice Asongu
Keyword(s):  
Agricultural Sector ◽  
Explanatory Power ◽  
Value Added ◽  
Annual Data ◽  
Industrial Output ◽  
Industrial Growth ◽  
Content Type ◽  
Long Run ◽  
The Government

PurposeThe study aims to analyse the role of finance in the agro-industrialisation nexus in Nigeria using annual data on manufacturing value added, agricultural value added and volume of finance availed to the agricultural sector from 1981 to 2015.Design/methodology/approachTo establish the presence of a long-run relationship, the error correction model and bounds cointegration techniques are employed. Likewise, the model is augmented to test whether the associated relationship between industrial output and agricultural output depends on access to finance by farmers with the inclusion of an interaction term.FindingsSome salient contributions to the literature are as follows: agriculture and finance are strong and positive predictors of industrialisation in the long run; in the short run, past realisations of industrial output and finance have significant asymmetric effects on industrial output; the explanatory power of agriculture decreases with the growth of the financial system; and the long-run results validate the role of finance in the agro-industrialisation nexus.Originality/valueGiven these findings, achieving growth in the agricultural sector that will induce desired industrialisation should be prioritised by the government through agencies such as the central bank, financial intermediaries and other stakeholders with a view to making agricultural financing a major concern for sustainable domestic consumption and industrial growth.

scholarly journals Long-run Stock Performance of Equity-Issuing Firms: The Case of Private Placements in Singapore

2002 ◽  
Vol 05 (03) ◽  
pp. 417-438 ◽  
Author(s):  
Sheng-Syan Chen ◽  
Kim Wai Ho ◽  
Cheng-Few Lee ◽  
Gillian H. H. Yeo
Keyword(s):  
Earnings Management ◽  
Small Firms ◽  
Ownership Concentration ◽  
Positive Relation ◽  
Stock Performance ◽  
Listed Firms ◽  
Long Run ◽  
Private Placements ◽  
Growth Prospects ◽  
Book To Market Ratio

We find that Singapore listed firms which have conducted private placements subsequently experience long-run stock underperformance. The long-run underperformance is more severe for small firms and firms with a higher book-to-market ratio. This suggests that small firms and firms with poorer growth prospects are more likely to time the issue when the stock is temporarily overvalued. Further more, we find a positive relation between the long-run stock performance and the change in ownership concentration of the issuing firms, which is consistent with the alignment-of-interests hypothesis. We do not find evidence supporting the earnings-management hypothesis.

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