Business, Management and Accounting
3 years ago

Failed IPO firms in China deceive investors for higher post-IPO returns.

1 view
Applied Economics and Finance
Earnings Management for Second-time IPOs: Evidence from China
Songling Yang, Mengwei Liu, Hemei Li, Juncheng Li, Qiuyue Zhang

Paper Summary

Firms in China that fail in their first IPO application make changes before trying again. They adjust their earnings management tactics to get approval from the CSRC. After a successful second IPO, these firms increase their earnings management. This behavior misleads investors, leading to higher IPO prices and post-IPO returns.

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