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Title: State ownership and earnings management around initial public offerings : evidence from China
Authors: Cheng, CSA 
Wang, J
Wei, SX
Keywords: Earnings management
Initial public offering
State-owned enterprises
Issue Date: 2015
Publisher: International Accounting Section of the American Accounting Association
Source: Journal of international accounting research, 2015, v. 14, no. 2, p. 89-116 How to cite?
Journal: Journal of international accounting research 
Abstract: This study investigates earnings management by firms around their initial public offerings (IPOs) in domestic Chinese equity markets. Using a sample of 437 IPO firms, we find that Chinese firms tend to inflate earnings around their IPOs. We also show that state-owned enterprises (SOEs) manage earnings to a lesser degree than non-state-owned enterprises (NSOEs) do around IPOs. Furthermore, using path analysis, we find that two incentive factors, CEO shareholding and accessibility to bank loans, explain 48 percent of the correlation between state ownership and earnings management for IPO firms. In particular, accessibility to bank loans is a more important incentive factor that leads to less earnings management for SOEs than NSOEs.
ISSN: 1542-6297
DOI: 10.2308/jiar-51193
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