4.5.1 IPO Conservatism and the Prob

4.5.1 IPO Conservatism and the Probability of Issuing a SEO
To examine the distribution of the sample based on their CSCORE, the sample firms are sorted into quartiles based on PreCSCORE_IPO and PostCSCORE_IPO. The first quartile (Q1) has the highest mean conservatism score and is the most conservative earnings reporting group. The fourth quartile (Q4) has the lowest mean conservatism score and is the least conservative earnings reporting group. The analysis of PreCSCORE_IPO quartiles is reported in Panel A of Table 4-3 and PostCSCORE_IPO in Panel B. In particular, 158 out of 313 firms (50%) went for SEO within one year of their IPO in the PreCSCORE_IPO analysis and 223 out of 437 firms (51%) within two years of their IPO in the PostCSCORE_IPO analysis. This indicates that half of the sample IPO firms reissued equity at least in the first two years of their operation after the IPO. As reported in Panel A of Table 4-3, Q1 has the lowest number of IPO firms that reissued equity within one to three years after the IPO. For four and five years subsequent to the IPO, Q2 has the lowest number of firms and Q1 has the second lowest. Q4 reports the largest number of firms that reissued equity all across one to five years after the IPO. Accordingly, this result indicates that firms reporting less conservatively in the pre-IPO year tend to come back to the equity market within one to five years subsequent to the IPO. Table 4-3 (Panel B) provides consistent results. Specifically, Q1 has the lowest number of firms that reissued equity within two to five years of the IPO, while Q4 reports the largest number of firms. There is a monotonic increase in the number of firms from Q1 to Q4 across different years. This result indicates that firms reporting less conservatively in the IPO year tend to obtain equity financing again within five years subsequent to the IPO. Frequent issuers are the firms that reissue equity more than once within the five years of their IPO and there appears to be no systematic pattern across the quartile of the Frequent Issuers sample. A multivariate analysis is also employed to test the association between IPO conservatism and the probability of next equity financing. Table 4-4 presents the correlation matrix 15 of independent variables used in the regression model for PreCSCORE_IPO analysis and Table 4-5 for PostCSCORE_IPO analysis. As tabulated in Table 4-4 and 4-5, Age is negatively correlated with Cash which is not consistent with the life-cycle theory that young firms are in the growth-stage with lower operating cash flow. DeAngelo et al. (2010) suggest that more mature firms selling stock tend to have Altman Z-scores indicative of serious financial distress. Accordingly, this may indicate that older private firms experiencing a cash short-fall may decide to go public to raise cash, driving a negative correlation between Age and Cash in the dataset. The reported correlation coefficients 16 are not overly high as the higher correlations obtained are those between Tobin’s q and IPO_Undepricing (at 38% in Table 4-4 andThe results for PreCSCORE_IPO regression analysis are presented in Table 4-6 and the results for PostCSCORE_IPO are reported in Table 4-7. In Table 4-6, the coefficient on
PreCSCORE_IPO is negative in all regressions (SEO_1 to SEO_5), but is not statistically significant. In Table 4-7, the coefficient on PostCSCORE_IPO is negative and statistically significant at 1% in all regressions, suggesting that the extent of conservatism adopted by a firm in the IPO year is negatively associated with the probability of reissuing equity within two to five years subsequent to the IPO. Consistent with this result, the coefficient on PostCSCORE_IPO is also negative and statistically significant at 1% in the regression where SEO_Frequent is the dependent variable, suggesting that the lower the conservatism in the IPO year, the higher the probability of reissuing equity more than once within five years of the IPO. The coefficients on Cash are negative, indicating that the higher the amount of cash, the lower the probability of reissuing soon after the IPO. However, the coefficient I statistically significant only in SEO_1 regression in PreCSCORE_IPO analysis and SEO_2 and SEO_3 regression in PostCSCORE_IPO analysis. The coefficient on Lev is positive and statistically significant in all regressions in PostCSCORE_IPO analysis (except for the SEO_2 regression), indicating that the IPO firms with higher leverage in the IPO year are more likely to go for equity financing again soon after their IPO. However, the coefficient is not statistically significant in PreCSCORE_IPO analysis. The coefficient on IPO_Underpricing is negative and statistically significant in SEO_2 to SEO_5 regressions in both PreCSCORE_IPO and PostCSCORE_IPO analysis. This result suggests that firms underpricing their IPO less are more likely to issue SEO soon after the IPO. This result is in line with Michaely and Shaw (1994) and Spiess and Pettway (1997) who argue that the likelihood of SEO is related to the firm’s success in the after-issue market rather than the degree of its initial return. The coefficient on IPO_Underwriter is positive and statistically significant in all regressions in both PreCSCORE_IPO and PostCSCORE_IPO analysis (except for SEO_1 regression). This result suggests that firms employing more prestigious underwriters at the time of their IPO are more likely to issue SEO soon after the IPO. Prior research finds that more prestigious underwriters reduce information asymmetry for equity issuing firms by adding credibility to the issue (e.g., Carter & Manaster 1990; Carter & Dark 1993; Carter et al. 1998). Thus, firms that are going to reissue soon after their IPO may want to reduce the information asymmetry by employing more prestigious underwriters to raise the next equity financing on more favorable terms. In the regression where SEO_Frequent is the dependent variable, only the coefficient on Lev is positive and statistically significant in PostCSCORE_IPO analysis, suggesting that firms with higher leverage in the IPO year are more likely to reissue equity more than once within five years subsequent to the IPO. All other control variables do not have a statistically significant coefficient.
4.5.2 IPO Conservatism and the Probability of Raising Funds through Divestitures
In this section, the thesis investigates the association between issuers’ conservatism and the probability of raising funds through divestitures. The results from the previous section are interpreted as IPO firms reporting more conservatively in the IPO year having less need for extra financing within five years of their IPO. However, it is possible that these IPO firms may use other means of raising cash instead of equity financing such as divestment. Dhaliwal et al. (2014) document that divestment is an important instrument that firms use to generate cash. As a result, this thesis conducts an additional regression analysis testing the association between the PreCSCORE_IPO and PostCSCORE_IPO and the probability of divestment. Divestment data is obtained from the M&A module of the SDC database. The M&A transactions which occurred from the period 1990 to 2010 and which were identified as having the same target as the ultimate parent are matched against the IPO sample data. Out of 2,356 sample firms, 301 firms divested a subsidiary within five years subsequent to the IPO. The dependent variable of the regressions is Div_n (where n=1, 2, 3, 4 and 5) that equals one if the firm divested within n years subsequent to the IPO and otherwise zero. Table 4-8 reports the results for PreCSCORE_IPO analysis and Table 4-9 for PostCSCORE_IPO analysis. The coefficient on PreCSCORE_IPO is negative across all regressions in Table 4-8, but statistically insignificant, suggesting that IPO firms’
141 conservatism in the pre-IPO year is not significantly associated with the probability of divestment. The coefficient on PostCSCORE_IPO is negative and statistically significant at 1% to 5% in all regressions in Table 4-9 (except for the Div_3 regression), providing some evidence that the extent of conservatism adopted by firms in the IPO year is negatively associated with the likelihood of divestiture within five years subsequent to the IPO. It is noted that the 2 for some of the regressions provided in Table 4-8 and Table 4-9 is not statistically significant, rejecting the overall significance of these regressions. However, this result at least confirms that the extent of IPO issuers’ conservatism is not significantly associated with the probability of divestment subsequent to the IPO. This also supports the previous finding that issuers adopting higher conservatism in the IPO year are less likely to reissue equity within five years of the IPO due to their lower nearterm cash needs. As for the control variables, only the coefficient on Age remains statistically significant across Div_2 to Div_5 regressions in the PreCSCORE_IPO analysis, providing some evidence that younger IPO firms are more likely to go for divestiture soon after their IPO.

Kết quả (Việt) 1:

4.5.1 IPO bảo thủ và khả năng của việc ban hành một SEO To examine the distribution of the sample based on their CSCORE, the sample firms are sorted into quartiles based on PreCSCORE_IPO and PostCSCORE_IPO. The first quartile (Q1) has the highest mean conservatism score and is the most conservative earnings reporting group. The fourth quartile (Q4) has the lowest mean conservatism score and is the least conservative earnings reporting group. The analysis of PreCSCORE_IPO quartiles is reported in Panel A of Table 4-3 and PostCSCORE_IPO in Panel B. In particular, 158 out of 313 firms (50%) went for SEO within one year of their IPO in the PreCSCORE_IPO analysis and 223 out of 437 firms (51%) within two years of their IPO in the PostCSCORE_IPO analysis. This indicates that half of the sample IPO firms reissued equity at least in the first two years of their operation after the IPO. As reported in Panel A of Table 4-3, Q1 has the lowest number of IPO firms that reissued equity within one to three years after the IPO. For four and five years subsequent to the IPO, Q2 has the lowest number of firms and Q1 has the second lowest. Q4 reports the largest number of firms that reissued equity all across one to five years after the IPO. Accordingly, this result indicates that firms reporting less conservatively in the pre-IPO year tend to come back to the equity market within one to five years subsequent to the IPO. Table 4-3 (Panel B) provides consistent results. Specifically, Q1 has the lowest number of firms that reissued equity within two to five years of the IPO, while Q4 reports the largest number of firms. There is a monotonic increase in the number of firms from Q1 to Q4 across different years. This result indicates that firms reporting less conservatively in the IPO year tend to obtain equity financing again within five years subsequent to the IPO. Frequent issuers are the firms that reissue equity more than once within the five years of their IPO and there appears to be no systematic pattern across the quartile of the Frequent Issuers sample. A multivariate analysis is also employed to test the association between IPO conservatism and the probability of next equity financing. Table 4-4 presents the correlation matrix 15 of independent variables used in the regression model for PreCSCORE_IPO analysis and Table 4-5 for PostCSCORE_IPO analysis. As tabulated in Table 4-4 and 4-5, Age is negatively correlated with Cash which is not consistent with the life-cycle theory that young firms are in the growth-stage with lower operating cash flow. DeAngelo et al. (2010) suggest that more mature firms selling stock tend to have Altman Z-scores indicative of serious financial distress. Accordingly, this may indicate that older private firms experiencing a cash short-fall may decide to go public to raise cash, driving a negative correlation between Age and Cash in the dataset. The reported correlation coefficients 16 are not overly high as the higher correlations obtained are those between Tobin’s q and IPO_Undepricing (at 38% in Table 4-4 andThe results for PreCSCORE_IPO regression analysis are presented in Table 4-6 and the results for PostCSCORE_IPO are reported in Table 4-7. In Table 4-6, the coefficient onPreCSCORE_IPO is negative in all regressions (SEO_1 to SEO_5), but is not statistically significant. In Table 4-7, the coefficient on PostCSCORE_IPO is negative and statistically significant at 1% in all regressions, suggesting that the extent of conservatism adopted by a firm in the IPO year is negatively associated with the probability of reissuing equity within two to five years subsequent to the IPO. Consistent with this result, the coefficient on PostCSCORE_IPO is also negative and statistically significant at 1% in the regression where SEO_Frequent is the dependent variable, suggesting that the lower the conservatism in the IPO year, the higher the probability of reissuing equity more than once within five years of the IPO. The coefficients on Cash are negative, indicating that the higher the amount of cash, the lower the probability of reissuing soon after the IPO. However, the coefficient I statistically significant only in SEO_1 regression in PreCSCORE_IPO analysis and SEO_2 and SEO_3 regression in PostCSCORE_IPO analysis. The coefficient on Lev is positive and statistically significant in all regressions in PostCSCORE_IPO analysis (except for the SEO_2 regression), indicating that the IPO firms with higher leverage in the IPO year are more likely to go for equity financing again soon after their IPO. However, the coefficient is not statistically significant in PreCSCORE_IPO analysis. The coefficient on IPO_Underpricing is negative and statistically significant in SEO_2 to SEO_5 regressions in both PreCSCORE_IPO and PostCSCORE_IPO analysis. This result suggests that firms underpricing their IPO less are more likely to issue SEO soon after the IPO. This result is in line with Michaely and Shaw (1994) and Spiess and Pettway (1997) who argue that the likelihood of SEO is related to the firm’s success in the after-issue market rather than the degree of its initial return. The coefficient on IPO_Underwriter is positive and statistically significant in all regressions in both PreCSCORE_IPO and PostCSCORE_IPO analysis (except for SEO_1 regression). This result suggests that firms employing more prestigious underwriters at the time of their IPO are more likely to issue SEO soon after the IPO. Prior research finds that more prestigious underwriters reduce information asymmetry for equity issuing firms by adding credibility to the issue (e.g., Carter & Manaster 1990; Carter & Dark 1993; Carter et al. 1998). Thus, firms that are going to reissue soon after their IPO may want to reduce the information asymmetry by employing more prestigious underwriters to raise the next equity financing on more favorable terms. In the regression where SEO_Frequent is the dependent variable, only the coefficient on Lev is positive and statistically significant in PostCSCORE_IPO analysis, suggesting that firms with higher leverage in the IPO year are more likely to reissue equity more than once within five years subsequent to the IPO. All other control variables do not have a statistically significant coefficient.4.5.2 IPO bảo thủ và khả năng gây quỹ thông qua Divestitures Trong phần này, các luận án điều tra sự liên kết giữa công ty phát hành bảo thủ và khả năng gây quỹ thông qua divestitures. Các kết quả từ phần trước được hiểu là IPO công ty báo cáo nhiều conservatively năm IPO có ít cần thiết cho phụ tài trợ trong vòng năm năm của IPO. Tuy nhiên, có thể các công ty IPO có thể sử dụng các phương tiện khác của việc nâng cao tiền mặt thay vì vốn chủ sở hữu tài chính như truyện. Dhaliwal et al. (2014) tài liệu các truyện đó là một công cụ quan trọng mà công ty sử dụng để tạo ra tiền mặt. Kết quả là, luận án này tiến hành một phân tích hồi quy bổ sung kiểm tra sự liên kết giữa PreCSCORE_IPO và PostCSCORE_IPO và xác suất của truyện. Truyện dữ liệu thu được từ M & một mô-đun của cơ sở dữ liệu SDC. M & một giao dịch mà xuất hiện từ giai đoạn năm 1990 đến 2010 và đó đã được xác định là có cùng một mục tiêu là phụ huynh cuối cùng được kết hợp với dữ liệu mẫu IPO. Ra khỏi 2.356 mẫu công ty, công ty 301 divested một công ty con trong vòng năm năm tiếp theo để IPO. Biến phụ thuộc của các regressions là Div_n (trong trường hợp n = 1, 2, 3, 4 và 5) mà bằng một nếu công ty divested trong n năm tiếp theo để IPO và nếu không thì không. Bảng 4-8 báo cáo kết quả cho phân tích PreCSCORE_IPO và bảng 4-9 để phân tích PostCSCORE_IPO. Hệ số trên PreCSCORE_IPO là tiêu cực trên tất cả regressions trong bảng 4-8, nhưng về mặt thống kê không đáng kể, cho thấy rằng công ty IPO141 bảo thủ năm pre-IPO là không đáng kể liên quan đến xác suất của truyện. Hệ số trên PostCSCORE_IPO là tiêu cực và ý nghĩa thống kê quan trọng tại 1% đến 5% trong tất cả regressions trong bảng 4-9 (ngoại trừ các hồi quy Div_3), cung cấp một số bằng chứng cho thấy mức độ của bảo thủ đã thông qua bởi các công ty trong năm IPO là tiêu cực liên kết với khả năng của divestiture trong vòng năm năm tiếp theo để IPO. Chúng tôi lưu ý rằng không phải là 2 cho một số regressions cung cấp trong bảng 4-8 và bảng 4-9 ý nghĩa thống kê quan trọng, từ chối ý nghĩa tổng thể của những regressions. Tuy nhiên, kết quả này ít xác nhận rằng mức độ của IPO công ty phát hành bảo thủ không phải là đáng kể liên quan đến xác suất của truyện tiếp theo để IPO. Điều này cũng hỗ trợ việc tìm kiếm trước đó rằng công ty phát hành thông qua các bảo thủ cao năm IPO là ít có khả năng phát hành lại vốn chủ sở hữu trong vòng năm năm của IPO do nhu cầu tiền mặt nearterm thấp hơn. Đối với các biến điều khiển, chỉ hệ số ngày tuổi vẫn còn ý nghĩa thống kê trên Div_2 để Div_5 regressions trong phân tích PreCSCORE_IPO, cung cấp một số bằng chứng cho thấy em IPO công ty có nhiều khả năng để đi cho divestiture ngay sau khi IPO của họ.