The impact of the CSRC Regulation No. 12-1996 on the credibility of Chinese IPO earnings forecasts

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• 作者：Jerry Sun ; Guoping Liu
• 关键词：IPO ; Regulation ; Earnings forecasts ; Forecast reliability
• 刊名：Global Finance Journal
• 出版年：2009
• 出版时间：2009
• 年：2009
• 卷：20
• 期：2
• 页码：165-179
• 全文大小：232 K

文摘

This study examines whether the Chinese Securities Regulatory Commission (the CSRC) Regulation No. 12-1996, Announcement of Some Rules on the Issuance of Shares, may enhance the credibility of management earnings forecasts in Chinese IPO prospectuses. Using a sample of 858 IPO earnings forecasts over the period 1991–2005, we find that earnings forecasts have been less optimistic and more accurate after the regulation was promulgated on December 26, 1996. Overall, our findings suggest that the CSRC Regulation No. 12-1996 can improve the reliability of Chinese IPO earnings forecasts.