Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/187576
Authors: 
Hu, Zhiying
Cai, Weixing
Han, Jinjin
Sa, Rula
Year of Publication: 
2012
Citation: 
[Journal:] China Journal of Accounting Research [ISSN:] 1755-3091 [Volume:] 5 [Year:] 2012 [Issue:] 3 [Pages:] 251-268
Abstract: 
Using a sample of IPO companies on the Shenzhen Small and Median Enterprise Board and the ChiNext Stock Market between 2005 and 2009, this paper analyzes the effect of venture capital participation on accounting information quality. We find that venture capitalists have a significant effect on earnings management, with reduced discretionary accruals before the expiration of the equity lock-up period and enhanced discretionary accruals after the expiration of the equity lock-up period. Our findings support the moral hazard hypothesis of venture capital, but not the certification/monitoring role of venture capital in IPOs. In addition, we find that venture capital plays a more important role in the earnings management of non-state-owned IPO companies than of state-owned companies.
Subjects: 
Venture capital
Earnings management
IPO
Lock-up period
JEL: 
G32
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/
Document Type: 
Article
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