The economic consequences of IPO sales growth management: Evidence from ChiNext‐listed companies in China
研究中国创业板公司在IPO期间是否操纵销售增长以影响发行价，发现操纵公司采用更激进的促销策略、获得更高估值，但上市后业绩和股价表现更差，且市场中介的良好声誉能缓解业绩反转。
Abstract Based on a sample of Chinese ChiNext (Growth Enterprise Market) firms during their initial public offerings (IPOs) from 2009 to 2019, this study explores whether these firms engage in sales growth management and examines its economic consequences. We provide evidence that ChiNext firms tend to manage their sales growth to influence issuance prices during IPOs. Further, the study identifies several indicators that suggest growth‐managing firms engage in more aggressive and riskier promotional strategies, such as longer turnover days of receivables, lower gross profit margins and higher allowance ratios for doubtful accounts. The study also finds that growth‐managing firms are more likely to have higher price‐to‐earnings ratios, offer prices, overfund ratios, first‐day closing prices and a higher percentage of positive posts, suggesting that these firms aim to inflate their growth to attract more funds from financial markets by influencing investors' expectations. Additionally, we find a negative relationship between sales management and post‐IPO stock returns, indicating that investors cannot effectively identify sales management by ChiNext IPO firms. Cross‐sectional analysis also shows that growth‐managing ChiNext IPO firms are likely to have depressed post‐IPO performance, whereas the market intermediary (brokers, auditors and asset appraisal institutions) with a good reputation helps to alleviate future performance reversals.