Earnings Management and the Long‐Run Underperformance of Firms Following Convertible Bond Offers
检验可转换债券发行者在发行前后通过操控应计项目来粉饰利润，是否导致其后五年内经营业绩和股价表现长期不佳，并发现市场会暂时高估这些公司，但随后会纠正错误。
Abstract: This paper examines whether the long‐run underperformance of convertible bond issuers can be explained by earnings management, as reflected in discretionary current accruals around the time of the offer. Consistent with the earnings management hypothesis, we find that convertible issuers who adjust their discretionary current accruals to report higher net income in the issue year will generally experience inferior operating and stock return performance over the five‐year post‐issue period. Our findings indicate that there is some temporary overvaluation of convertible issuers by the stock market, but that the resultant disappointed investors will subsequently correct their valuation errors. The similarity of our results to those reported within the prior literature on initial public offers (IPOs) and seasoned equity offers (SEOs) suggests that the earnings management hypothesis is not unique to stock offers, but that it actually extends to convertible bond offers.