Underwriter Reputation,IPO Earnings Management And Post-Offer Performance

Because the economy of our country is in the phase of development,capital market is dominated by the government and the administrative color is strong.Due to the supply scarcity of resources,companies which intend to achieve the standard and improve the price as much as possible usually have strong motivation to whitewash financial statements.Companies are asked to hire professional underwriters,accounting firms and law firms during the IPO process.Among them,underwriters play a unique and irreplaceable role in improving the quality of information disclosure and promoting the efficiency of resource allocation.Underwriters use their professional knowledge and play the role of "third party certification intermediary",which improve the operation efficiency of the market.However,the problem was not completely solved.The reliability of Underwriters was not always solid,on the one hand,the issuer financial packaging was so smart beyond the Underwriters ability to identify;on the other hand,the underwriters are tempted to get the underwriting fees,even conspire with the issuer of fraud case.In this case,the underwriters with poor record will lose the trust of investors,the value of the brokers with high reputation will be highlighted.Foreign existing researches confirmed the existence of underwriter reputation mechanism,i.e.underwriter reputation is negatively related to the earnings management,companies tutored by high reputation are issued with less underpricing and gain higher long-term returns.Whether underwriter reputation mechanism in our country have played the role?This article will discuss the matter in order to obtain the empirical evidences.This paper starts from the literature review and theoretical analysis,then followed by research hypothesis,the integrated use of descriptive statistics,correlation analysis and multiple regression analysis test,finally ended by the conclusion.The article selects the listed companies from 2007 to 2014,uses the M-W method to estimate the underwriter reputation according to the underwriting share and underwriting number share,and chooses modified Jones model to calculate accrued earnings management.Through the empirical study,this article finds that in small and medium-sized board market,underwriter reputation can significantly inhibit earnings management of enterprise,the selection mechanism of the underwriter reputation and enterprise quality also has been significant.In addition,this paper studies constraint of the underwriter reputation,finding that higher competitive industries,the marketization area,the internal control can effectively help the underwriter reputation restrain earnings management of the enterprise.