Earnings Quality and International IPO Underpricing
Thomas Jason Boulton
Indiana University Dept. of Finance
Chad J. Zutter
University of Pittsburgh - Finance Group
August 28, 2008
Accounting Review, Vol. 86, No. 2, 2011
This study examines the impact of country-level earnings quality on IPO underpricing. Examining 10,783 IPOs from 37 countries, we find that IPOs are underpriced less in countries where public firms produce higher quality earnings information. This finding persists after controlling for other deal- and country-specific factors that affect IPO underpricing, and it is driven neither by the large and relatively transparent markets in the U.S. and U.K. nor by the relatively opaque Japanese market. The impact of low earnings quality on underpricing is partially offset by the use of a top-tier underwriter.
Number of Pages in PDF File: 41
Keywords: International finance, Earnings quality, Initial public offerings, Underpricing, Valuation
JEL Classification: G15, G24, G30, G32, G34Accepted Paper Series
Date posted: March 20, 2007 ; Last revised: June 28, 2011
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