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

Jerry Sun and Guoping Liu

Global Finance Journal, 2009, vol. 20, issue 2, 165-179

Abstract: 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.

Keywords: IPO; Regulation; Earnings; forecasts; Forecast; reliability (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:20:y:2009:i:2:p:165-179

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