Impact of accounting conservatism on IPO under-pricing: evidence from India
In this paper, we investigate whether the use of accounting conservatism in India decreases IPO underpricing, which is of attention to stakeholders and supervisors. Furthermore, the study examines how asymmetry information affects the implication of accounting conservatism for IPOs. Based on a regre...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2022-12-01
|
| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2022.2132641 |
| _version_ | 1798019724566593536 |
|---|---|
| author | Nenavath Sreenu Ashis Kumar Pradhan Vinh Vo Xuan B. Koteswara Rao Naik |
| author_facet | Nenavath Sreenu Ashis Kumar Pradhan Vinh Vo Xuan B. Koteswara Rao Naik |
| author_sort | Nenavath Sreenu |
| collection | DOAJ |
| description | In this paper, we investigate whether the use of accounting conservatism in India decreases IPO underpricing, which is of attention to stakeholders and supervisors. Furthermore, the study examines how asymmetry information affects the implication of accounting conservatism for IPOs. Based on a regression analysis of 527 firms that went public through IPOs of “A” shares listed on the national stock exchanges between 2000 and 2020, the paper also examines whether the relationship between conservatism and under-pricing is robust to alternative measures of accounting conservatism, mean regressions, sample exclusions, and endogenous treatment models. The research study finds that accounting conservatism is negatively associated with the degree of IPO under-pricing, and the association between accounting conservatism and IPO under-pricing is more perceptible when information asymmetry is high. The paper’s originality should shed light on what drives IPO underpricing and how it could be affected by accounting conservatism in an Indian economy, and provide find evidence that legal origin, a factor linked to the practice of conservatism, influences the relationship between under-pricing and conservatism. |
| first_indexed | 2024-04-11T16:45:33Z |
| format | Article |
| id | doaj.art-e2a65a8aebd24ced8b9987de6299981b |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-04-11T16:45:33Z |
| publishDate | 2022-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-e2a65a8aebd24ced8b9987de6299981b2022-12-22T04:13:35ZengTaylor & Francis GroupCogent Economics & Finance2332-20392022-12-0110110.1080/23322039.2022.2132641Impact of accounting conservatism on IPO under-pricing: evidence from IndiaNenavath Sreenu0Ashis Kumar Pradhan1Vinh Vo Xuan2B. Koteswara Rao Naik3Department of Management Studies, Maulana Azad National Institute of Technology Bhopal, Bhopal, IndiaDepartment of Humanities and Social Sciences, Maulana Azad National Institute of Technology Bhopal, Bhopal, IndiaBusiness Research, Dean of the Institute of Business Research University of Economics Ho Chi Minh City, Ho Chi Minh City, VietnamBusiness Research, NITIE Mumbai, Mumbai, IndiaIn this paper, we investigate whether the use of accounting conservatism in India decreases IPO underpricing, which is of attention to stakeholders and supervisors. Furthermore, the study examines how asymmetry information affects the implication of accounting conservatism for IPOs. Based on a regression analysis of 527 firms that went public through IPOs of “A” shares listed on the national stock exchanges between 2000 and 2020, the paper also examines whether the relationship between conservatism and under-pricing is robust to alternative measures of accounting conservatism, mean regressions, sample exclusions, and endogenous treatment models. The research study finds that accounting conservatism is negatively associated with the degree of IPO under-pricing, and the association between accounting conservatism and IPO under-pricing is more perceptible when information asymmetry is high. The paper’s originality should shed light on what drives IPO underpricing and how it could be affected by accounting conservatism in an Indian economy, and provide find evidence that legal origin, a factor linked to the practice of conservatism, influences the relationship between under-pricing and conservatism.https://www.tandfonline.com/doi/10.1080/23322039.2022.2132641IPOaccounting conservatismunder-pricingasymmetry informationM40M41 |
| spellingShingle | Nenavath Sreenu Ashis Kumar Pradhan Vinh Vo Xuan B. Koteswara Rao Naik Impact of accounting conservatism on IPO under-pricing: evidence from India Cogent Economics & Finance IPO accounting conservatism under-pricing asymmetry information M40 M41 |
| title | Impact of accounting conservatism on IPO under-pricing: evidence from India |
| title_full | Impact of accounting conservatism on IPO under-pricing: evidence from India |
| title_fullStr | Impact of accounting conservatism on IPO under-pricing: evidence from India |
| title_full_unstemmed | Impact of accounting conservatism on IPO under-pricing: evidence from India |
| title_short | Impact of accounting conservatism on IPO under-pricing: evidence from India |
| title_sort | impact of accounting conservatism on ipo under pricing evidence from india |
| topic | IPO accounting conservatism under-pricing asymmetry information M40 M41 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2022.2132641 |
| work_keys_str_mv | AT nenavathsreenu impactofaccountingconservatismonipounderpricingevidencefromindia AT ashiskumarpradhan impactofaccountingconservatismonipounderpricingevidencefromindia AT vinhvoxuan impactofaccountingconservatismonipounderpricingevidencefromindia AT bkoteswararaonaik impactofaccountingconservatismonipounderpricingevidencefromindia |