Earnings Management and New Listings: Evidence from Vietnam

Earnings management around corporate events has been widely discussed in literature review which has shown mixed results. Furthermore, prior studies have extensively focused on earnings management around initial public offerings (IPOs) and seasoned equity offerings (SEOs), while less attention has...

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Autores principales:	Anh Huu Nguyen, Chi Thi Duong
Formato:	article
Lenguaje:	EN
Publicado:	Universiti Sains Malaysia 2021
Materias:	accounting accruals earnings management Ho Chi Minh City Stock Exchange listing requirements new listings Business HF5001-6182
Acceso en línea:	https://doaj.org/article/624e20a374d94a07ac390533a9d5fe20
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spelling	oai:doaj.org-article:624e20a374d94a07ac390533a9d5fe202021-12-03T01:52:57ZEarnings Management and New Listings: Evidence from Vietnam10.21315/aamj2021.26.2.21394-26032180-4184https://doaj.org/article/624e20a374d94a07ac390533a9d5fe202021-12-01T00:00:00Zhttps://ejournal.usm.my/aamj/article/view/155https://doaj.org/toc/1394-2603https://doaj.org/toc/2180-4184 Earnings management around corporate events has been widely discussed in literature review which has shown mixed results. Furthermore, prior studies have extensively focused on earnings management around initial public offerings (IPOs) and seasoned equity offerings (SEOs), while less attention has been given to the listing event. Another motivation comes from the context of the undeveloped market. While earnings management has been widely discussed in developed countries, it is still limited in emerging countries in general and in Vietnam in particular, due to the lack of research on this phenomenon and the unique institutional feature and pre-listing profit requirement in Vietnam’s stock market. This research is conducted to investigate the earnings management behaviour around listing event in Vietnam. The sample of this study consists of financial data from 189 newly listed companies on the Ho Chi Minh City Stock Exchange (HOSE) for the period of 2009–2017. Four cross-sectional models were used to estimate earnings management, including two total accruals-based models and two current accruals-based models. This research makes important contributions to the body of literature on Vietnam’s stock market. First, this study provides empirical evidence suggesting a greater positive earnings management practice of newly listed firms in current accrual models than those in total accrual models. Second, the results from both parametric and non-parametric test statistics show that HOSE-listed firms present higher levels of earnings management in the year prior to the listing than those in post-listing year and two subsequent years after listing. Finally, new listing requirements in 2012 require the company’s return on equity (ROE) in the most recent year to be at least 5%. However, the paper finds no evidence to suggest that relative to all newly listed firms after the new profit requirement exhibit greater positive earnings management than that of firms listed before the change in pre-listing year. Anh Huu NguyenChi Thi DuongUniversiti Sains Malaysia articleaccounting accrualsearnings managementHo Chi Minh City Stock Exchangelisting requirementsnew listingsBusinessHF5001-6182ENAsian Academy of Management Journal, Vol 26, Iss 2 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	accounting accruals earnings management Ho Chi Minh City Stock Exchange listing requirements new listings Business HF5001-6182
spellingShingle	accounting accruals earnings management Ho Chi Minh City Stock Exchange listing requirements new listings Business HF5001-6182 Anh Huu Nguyen Chi Thi Duong Earnings Management and New Listings: Evidence from Vietnam
description	Earnings management around corporate events has been widely discussed in literature review which has shown mixed results. Furthermore, prior studies have extensively focused on earnings management around initial public offerings (IPOs) and seasoned equity offerings (SEOs), while less attention has been given to the listing event. Another motivation comes from the context of the undeveloped market. While earnings management has been widely discussed in developed countries, it is still limited in emerging countries in general and in Vietnam in particular, due to the lack of research on this phenomenon and the unique institutional feature and pre-listing profit requirement in Vietnam’s stock market. This research is conducted to investigate the earnings management behaviour around listing event in Vietnam. The sample of this study consists of financial data from 189 newly listed companies on the Ho Chi Minh City Stock Exchange (HOSE) for the period of 2009–2017. Four cross-sectional models were used to estimate earnings management, including two total accruals-based models and two current accruals-based models. This research makes important contributions to the body of literature on Vietnam’s stock market. First, this study provides empirical evidence suggesting a greater positive earnings management practice of newly listed firms in current accrual models than those in total accrual models. Second, the results from both parametric and non-parametric test statistics show that HOSE-listed firms present higher levels of earnings management in the year prior to the listing than those in post-listing year and two subsequent years after listing. Finally, new listing requirements in 2012 require the company’s return on equity (ROE) in the most recent year to be at least 5%. However, the paper finds no evidence to suggest that relative to all newly listed firms after the new profit requirement exhibit greater positive earnings management than that of firms listed before the change in pre-listing year.
format	article
author	Anh Huu Nguyen Chi Thi Duong
author_facet	Anh Huu Nguyen Chi Thi Duong
author_sort	Anh Huu Nguyen
title	Earnings Management and New Listings: Evidence from Vietnam
title_short	Earnings Management and New Listings: Evidence from Vietnam
title_full	Earnings Management and New Listings: Evidence from Vietnam
title_fullStr	Earnings Management and New Listings: Evidence from Vietnam
title_full_unstemmed	Earnings Management and New Listings: Evidence from Vietnam
title_sort	earnings management and new listings: evidence from vietnam
publisher	Universiti Sains Malaysia
publishDate	2021
url	https://doaj.org/article/624e20a374d94a07ac390533a9d5fe20
work_keys_str_mv	AT anhhuunguyen earningsmanagementandnewlistingsevidencefromvietnam AT chithiduong earningsmanagementandnewlistingsevidencefromvietnam
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Earnings Management and New Listings: Evidence from Vietnam

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