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Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership

The paper focuses on earnings quality (EQ) of Malaysian Initial Public Offering (IPO) firms and examines the effect of share moratorium regulation and institutional ownership on IPO firms’ EQ behavior. Analyzing both real and accrual earnings management (EM) to measure EQ of 220 sample IPO firms ove...

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Main Authors: Kalgo, Sani Hussaini, Amin, Bany Ariffin, Nahar, Hairul Suhaimi, Turmin, Siti Zaidah
Format: Article
Language:English
Published: Elsevier 2016
Online Access:http://psasir.upm.edu.my/id/eprint/55580/1/Earnings%20quality%20of%20Malaysian%20IPO%20firms.pdf
http://psasir.upm.edu.my/id/eprint/55580/
http://www.sciencedirect.com/science/article/pii/S2212567116000150
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spelling my.upm.eprints.555802017-08-14T03:49:07Z http://psasir.upm.edu.my/id/eprint/55580/ Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership Kalgo, Sani Hussaini Amin, Bany Ariffin Nahar, Hairul Suhaimi Turmin, Siti Zaidah The paper focuses on earnings quality (EQ) of Malaysian Initial Public Offering (IPO) firms and examines the effect of share moratorium regulation and institutional ownership on IPO firms’ EQ behavior. Analyzing both real and accrual earnings management (EM) to measure EQ of 220 sample IPO firms over the period from 2002 to 2009, the results indicate that Malaysian IPO firms engage in both real and accrual discretionary EM. Both EQ measures are also observed to be similar between firms with and without share moratorium provision, evidencing the support towards Malaysia's public policy guideline of subjecting all IPO firms to share moratorium regulations as a commitment device to reduce information asymmetry and adverse selection problem between the strategic owners and new investors. The multivariate results further indicate the effective monitoring of institutional shareholders over investee firms’ EQ. The overall results collectively suggest the need for investors to examine investee firms’ real activity discretionary behavior in their investment decisions while regulators should device means of constraining it. Elsevier 2016 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/55580/1/Earnings%20quality%20of%20Malaysian%20IPO%20firms.pdf Kalgo, Sani Hussaini and Amin, Bany Ariffin and Nahar, Hairul Suhaimi and Turmin, Siti Zaidah (2016) Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership. Procedia Economics and Finance, 35. pp. 107-116. ISSN 2212-5671 http://www.sciencedirect.com/science/article/pii/S2212567116000150 10.1016/S2212-5671(16)00015-0
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description The paper focuses on earnings quality (EQ) of Malaysian Initial Public Offering (IPO) firms and examines the effect of share moratorium regulation and institutional ownership on IPO firms’ EQ behavior. Analyzing both real and accrual earnings management (EM) to measure EQ of 220 sample IPO firms over the period from 2002 to 2009, the results indicate that Malaysian IPO firms engage in both real and accrual discretionary EM. Both EQ measures are also observed to be similar between firms with and without share moratorium provision, evidencing the support towards Malaysia's public policy guideline of subjecting all IPO firms to share moratorium regulations as a commitment device to reduce information asymmetry and adverse selection problem between the strategic owners and new investors. The multivariate results further indicate the effective monitoring of institutional shareholders over investee firms’ EQ. The overall results collectively suggest the need for investors to examine investee firms’ real activity discretionary behavior in their investment decisions while regulators should device means of constraining it.
format Article
author Kalgo, Sani Hussaini
Amin, Bany Ariffin
Nahar, Hairul Suhaimi
Turmin, Siti Zaidah
spellingShingle Kalgo, Sani Hussaini
Amin, Bany Ariffin
Nahar, Hairul Suhaimi
Turmin, Siti Zaidah
Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
author_facet Kalgo, Sani Hussaini
Amin, Bany Ariffin
Nahar, Hairul Suhaimi
Turmin, Siti Zaidah
author_sort Kalgo, Sani Hussaini
title Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
title_short Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
title_full Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
title_fullStr Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
title_full_unstemmed Earnings quality of Malaysian IPO firms: the effect of share moratorium provision and institutional ownership
title_sort earnings quality of malaysian ipo firms: the effect of share moratorium provision and institutional ownership
publisher Elsevier
publishDate 2016
url http://psasir.upm.edu.my/id/eprint/55580/1/Earnings%20quality%20of%20Malaysian%20IPO%20firms.pdf
http://psasir.upm.edu.my/id/eprint/55580/
http://www.sciencedirect.com/science/article/pii/S2212567116000150
_version_ 1643835937011007488
score 13.211869

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