Looking Attractive until You Sell: Earnings Management, Lockup Expiration, and Venture Capitalists
研究IPO公司锁定期满时股价下跌作为负面信号，发现风投支持的IPO公司盈余管理更强，但声誉好的风投能抑制这种行为，起到审计作用。
Abstract Earnings management occurs when managerial discretion allows managers to influence reported earnings and thus mislead some investors about the underlying economic performance and quality of the firm. This study considers how potential investors may guard against earnings management by observing negative stock price reaction at the lockup expiration period of initial public offering ( IPO ) firms as a negative signal. Findings from a sample of 160 newly public firms show that earnings management behaviour is stronger in IPO firms backed by venture capitalists ( VC s). Moreover, VC reputation negatively moderates this relationship such that IPO firms backed by reputable VC s are less likely to manage earnings, suggesting that reputable VC s serve an auditing function following an IPO . Overall, we provide insights into signalling theory by examining negative signals arising from the behaviour of multiple agents in an IPO firm.