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Do cross-border listing firms manage earnings or seize a window of opportunity?
Please use this identifier to cite or link to this item:
http://hdl.handle.net/1860/2640
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| Title: | Do cross-border listing firms manage earnings or seize a window of opportunity? |
| Authors: | Ndubizu, Gordian A. |
| Keywords: | Cross-Listing IPO
Discretionary Accruals
Earnings Management |
| Issue Date: | 2007 |
| Publisher: | American Accounting Association |
| Citation: | Accounting Review, 82(4): pp. 1009-1030. |
| Abstract: | Firms raising new equity capital at cross-listing (IPO) and those crosslisting
existing home-country public shares (non-IPO) benefit from earnings that are
high when they cross-list on U.S. stock exchanges. IPO firms have greater benefits
than non-IPO firms because they receive cash infusion at listing. I find that performance
(ROA) and cash flows peak at cross-listing period for all cross-border firms. Using a
matched-firm research design to control for industry and performance, the results suggest
that both IPO and non-IPO firms time cross-listing when performance is peaking
(seize a window of opportunity). Further tests investigate whether IPO and non-IPO
firms differ in their incentives to engage in earnings management at the time of crosslisting.
The results suggest that both appear to engage in the same level of earnings
management at the time of cross-listing. This suggests that incentives to boost earnings
to obtain higher cash infusion are not the main motivation for the earnings management
observed. Other incentives, such as greater investor recognition could be a
stronger motivation. |
| URI: | http://hdl.handle.net/1860/2640 |
| Appears in Collections: | Faculty Research and Publications (Accounting and Tax)
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