Determinants of Management Earnings Forecasts: The Case of Global Shipping IPOs

41 Pages Posted: 5 Nov 2017

See all articles by Wolfgang Drobetz

Wolfgang Drobetz

University of Hamburg

Dimitrios Gounopoulos

University of Bath

Anna Merika

American College of Greece (DEREE)

Andreas G. Merikas

University of Piraeus

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Date Written: November 2017

Abstract

Firms that go public on global stock markets are not obliged to disclose earnings forecasts in their prospectuses. We use this fact to examine the shipping industry, where most firms voluntarily issue earnings forecasts during the IPO process, thus providing unique, international‐level evidence. We find overall pessimistic forecasts of ship owners, primarily because of the industry's uncertain and volatile environment. High ship owner participation after going public is associated with less accurate earnings forecasts. Our results further indicate that financial leverage, a listing in an emerging stock market, and global market conditions are other main factors responsible for inaccurate earnings forecasts.

Keywords: earnings management, voluntary disclosure environment, forecast accuracy, IPOs

Suggested Citation

Drobetz, Wolfgang and Gounopoulos, Dimitrios and Merika, Anna and Merikas, Andreas G., Determinants of Management Earnings Forecasts: The Case of Global Shipping IPOs (November 2017). European Financial Management, Vol. 23, Issue 5, pp. 975-1015, 2017. Available at SSRN: https://ssrn.com/abstract=3064971 or http://dx.doi.org/10.1111/eufm.12121

Wolfgang Drobetz (Contact Author)

University of Hamburg ( email )

Moorweidenstrasse 18
Hamburg, 20148
Germany

Dimitrios Gounopoulos

University of Bath ( email )

School of Management,
Wessex House, Claverton Down
Bath, BA2 7AY
United Kingdom

Anna Merika

American College of Greece (DEREE) ( email )

Gravias 6,
Aghia Paraskevi
Athenes, 153-42
Greece

Andreas G. Merikas

University of Piraeus ( email )

Piraeus, LA
Greece

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