Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)

This paper investigates the relation between CEO turnover and earnings quality. We find that CEO turnover is more likely when earnings quality is poor. After we decompose earnings quality into innate earnings quality and discretionary earnings quality, we find that CEO turnover is significantly asso...

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Main Author: Dai, Lili
Other Authors: Ho Kim Wai
Format: Theses and Dissertations
Language:English
Published: 2011
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Online Access:https://hdl.handle.net/10356/42902
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-429022024-01-12T10:15:07Z Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?) Dai, Lili Ho Kim Wai Nanyang Business School DRNTU::Business::Finance::Corporate finance This paper investigates the relation between CEO turnover and earnings quality. We find that CEO turnover is more likely when earnings quality is poor. After we decompose earnings quality into innate earnings quality and discretionary earnings quality, we find that CEO turnover is significantly associated with the latter but not the former. The findings are economically significant. Specifically, an increase in the inverse measure of earnings quality from the 10th percentile to the 90th percentile increases the predicted probability of CEO turnover by 26 percent. The results concentrate on forced turnovers and are not explained by earnings restatements, failure to meet analysts’ forecasts, or risks. Further investigations suggest that the relation between earnings quality and CEO turnover is stronger for firms with less entrenched CEOs and better corporate governance. Among CEOs who are forced out, we find that career prospects are dimmer for those whose prior tenure is associated with poor discretionary earnings quality. We study the impacts of country-level information asymmetry, investors' home-country bias, effectiveness of contract enforcement mechanisms, and accessibility of legal recourse on IPO underpricing in 36 countries around the globe. DOCTOR OF PHILOSOPHY (NBS) 2011-02-17T08:15:34Z 2011-02-17T08:15:34Z 2010 2010 Thesis Dai, L. (2010). Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?). Doctoral thesis, Nanyang Technological University, Singapore. https://hdl.handle.net/10356/42902 10.32657/10356/42902 en 110 p. application/pdf application/pdf
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic DRNTU::Business::Finance::Corporate finance
spellingShingle DRNTU::Business::Finance::Corporate finance
Dai, Lili
Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
description This paper investigates the relation between CEO turnover and earnings quality. We find that CEO turnover is more likely when earnings quality is poor. After we decompose earnings quality into innate earnings quality and discretionary earnings quality, we find that CEO turnover is significantly associated with the latter but not the former. The findings are economically significant. Specifically, an increase in the inverse measure of earnings quality from the 10th percentile to the 90th percentile increases the predicted probability of CEO turnover by 26 percent. The results concentrate on forced turnovers and are not explained by earnings restatements, failure to meet analysts’ forecasts, or risks. Further investigations suggest that the relation between earnings quality and CEO turnover is stronger for firms with less entrenched CEOs and better corporate governance. Among CEOs who are forced out, we find that career prospects are dimmer for those whose prior tenure is associated with poor discretionary earnings quality. We study the impacts of country-level information asymmetry, investors' home-country bias, effectiveness of contract enforcement mechanisms, and accessibility of legal recourse on IPO underpricing in 36 countries around the globe.
author2 Ho Kim Wai
author_facet Ho Kim Wai
Dai, Lili
format Theses and Dissertations
author Dai, Lili
author_sort Dai, Lili
title Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
title_short Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
title_full Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
title_fullStr Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
title_full_unstemmed Two essays on corporate finance : essay 1 (CEO turnover and earnings quality), essay 2 (cross-country IPOs : what explains differences in underpricing?)
title_sort two essays on corporate finance : essay 1 (ceo turnover and earnings quality), essay 2 (cross-country ipos : what explains differences in underpricing?)
publishDate 2011
url https://hdl.handle.net/10356/42902
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