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Article: Behavioral theories and the pricing of IPOs' discretionary current accruals

TitleBehavioral theories and the pricing of IPOs' discretionary current accruals
Authors
KeywordsBehavioral Theories
Discretionary Accruals
Ipos
Limited Arbitrage
Market Efficiency
Issue Date2011
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0924-865X
Citation
Review Of Quantitative Finance And Accounting, 2011, v. 37 n. 1, p. 87-104 How to Cite?
AbstractThe main purpose of this paper is to provide additional evidence about the effect of discretionary current accruals on the pricing of IPOs. This paper seeks to discriminate between two alternative explanations for the prior findings: (1) behavioral biases coupled with limited arbitrage; and (2) the sample- and period-specific nature of the results in the prior literature. The IPOs from 1962 to 1998 were used to obtain the following results. First, there was not a negative association observed between discretionary current accruals and subsequent price performance for the 1926-1971 period. Second, analysis reveals that the pattern of cross-sectional evidence is inconsistent with the predictions made by behavioral theories. Third, in the 1972-1998 period, evidence of predictable negative performance attributable to IPO discretionary current accruals is limited to NASDAQ firms. These findings are difficult to reconcile with the explanation of behavioral biases coupled with limited arbitrage. © 2010 Springer Science+Business Media, LLC.
Persistent Identifierhttp://hdl.handle.net/10722/178060
ISSN
2015 SCImago Journal Rankings: 0.452
References

 

DC FieldValueLanguage
dc.contributor.authorLi, Xen_US
dc.date.accessioned2012-12-19T09:41:44Z-
dc.date.available2012-12-19T09:41:44Z-
dc.date.issued2011en_US
dc.identifier.citationReview Of Quantitative Finance And Accounting, 2011, v. 37 n. 1, p. 87-104en_US
dc.identifier.issn0924-865Xen_US
dc.identifier.urihttp://hdl.handle.net/10722/178060-
dc.description.abstractThe main purpose of this paper is to provide additional evidence about the effect of discretionary current accruals on the pricing of IPOs. This paper seeks to discriminate between two alternative explanations for the prior findings: (1) behavioral biases coupled with limited arbitrage; and (2) the sample- and period-specific nature of the results in the prior literature. The IPOs from 1962 to 1998 were used to obtain the following results. First, there was not a negative association observed between discretionary current accruals and subsequent price performance for the 1926-1971 period. Second, analysis reveals that the pattern of cross-sectional evidence is inconsistent with the predictions made by behavioral theories. Third, in the 1972-1998 period, evidence of predictable negative performance attributable to IPO discretionary current accruals is limited to NASDAQ firms. These findings are difficult to reconcile with the explanation of behavioral biases coupled with limited arbitrage. © 2010 Springer Science+Business Media, LLC.en_US
dc.languageengen_US
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0924-865Xen_US
dc.relation.ispartofReview of Quantitative Finance and Accountingen_US
dc.subjectBehavioral Theoriesen_US
dc.subjectDiscretionary Accrualsen_US
dc.subjectIposen_US
dc.subjectLimited Arbitrageen_US
dc.subjectMarket Efficiencyen_US
dc.titleBehavioral theories and the pricing of IPOs' discretionary current accrualsen_US
dc.typeArticleen_US
dc.identifier.emailLi, X: xuli1@hku.hken_US
dc.identifier.authorityLi, X=rp01615en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1007/s11156-010-0196-xen_US
dc.identifier.scopuseid_2-s2.0-79958712249en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-79958712249&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume37en_US
dc.identifier.issue1en_US
dc.identifier.spage87en_US
dc.identifier.epage104en_US
dc.identifier.eissn1573-7179-
dc.publisher.placeUnited Statesen_US
dc.identifier.scopusauthoridLi, X=42961803500en_US
dc.identifier.citeulike7781312-

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