 Anchor-backed IPOs, reported earnings, and heterogeneous investors' beliefsTaufique Samdani Journal of Corporate Finance, 2019, vol. 59, issue C, 72-87 Abstract: This paper examines whether the degree of heterogeneity of investors' beliefs is sensitive to reported earnings and “anchor” institutional investment in initial public offerings (IPOs). Evidence from a quasi-experimental setting — an IPO market with anchor investments, and an IPO market without anchor investments — reveals that heterogeneity of investors' beliefs associated with above-market-average earnings yields (EYs) is lower in anchor-backed IPOs than in non-anchor-backed IPOs. The findings, which are robust to endogeneity concerns, suggest that transparent anchor investment ahead of public filing lowers heterogeneity of investors' beliefs and thereby improves financial reporting efficiency, or the timeliness of price discovery from accounting information, independent of accounting standards and financial reporting quality. Keywords: Initial public offerings; Anchor investment; Heterogeneous investors' beliefs; Earnings yield; Financial reporting efficiency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:59:y:2019:i:c:p:72-87 DOI: 10.1016/j.jcorpfin.2017.05.002 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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