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Do reputable certifiers of quality exploit their reputations? Evidence from China’s IPO market

Ye Liu, Libing Fang and Honghai Yu

Economics Letters, 2018, vol. 163, issue C, 72-74

Abstract: While the theoretical literature predicts that reputable certifiers of quality may exploit their reputations, empirical evidence on reputation exploitation is limited. Using a sample from China’s IPO market, we find that underwriter (certifier) reputation is positively related to issuer earnings quality in cold markets. Consistent with reputation exploitation, this positive relationship disappears in hot markets.

Keywords: Quality certification; Reputation exploitation; IPO market; Underwriter (search for similar items in EconPapers)
JEL-codes: D8 L1 G2 D4 (search for similar items in EconPapers)
Date: 2018
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