Tamanho da fonte: 

Earnings management at the time of the IPO is an important issue because it can lead investors to pay an unrealistic price for their shares. This paper investigates the dynamics of earnings management in IPOs and the role of venture capitalists in hampering such practice. We study the behavior of earnings management in four two-quarter phases around the IPO: pre-IPO, IPO, lock-up and post-lock-up periods. Our results indicate that earning inflation occurs only in the IPO period (the quarter before the IPO and the immediately following one). We also find that reversal – earnings deflation – starts in the immediately subsequent period. Comparing venture-backed with non-venture-backed IPOs, we find that only marginally venture-backed IPOs present lower earnings management. However, when we control for the four different periods of the IPO, we observe that venture-backed IPOs present significantly less earnings management in the IPO period, exactly when firms inflate earnings. This result is robust across statistical methods and different methodologies used to estimate earnings management. Finally, by splitting the sample between venture-backed IPOs and non-venture-backed IPOs, we observe that venture-backed IPOs do no present any evidence of earnings management in any of the phases around the IPO.