| Summary: | 碩士 === 玄奘大學 === 財務金融學系碩士班 === 96 === Recently, it seems that most of companies have been initial public offerings (IPOs) to raise money to the open market. Prior to the previous literature, numerous of IPOs occurred to be underpriced. Thus, some IPOs companies deal with the earnings management in order to window dressing the finance report. On the other hand, the better corporate governance mechanism of IPOs companies has the incentives in promoting the profitability and performance of the corporation which cause the lower underpricing.
The main purpose of this paper is to explore the relationships among corporate governance, earning management and the underpricing of IPOs. We use board size, stock concentration, divergence between voting rights and cash flow rights as the proxies for governance mechanism. This study uses 364 IPOs as samples and employs the multiple regression approach as well as two-stage regression method during period from 2002 to 2005. Final empirical evidences show that the larger board size and the higher stock concentration of the IPOs firms will result in the lower underpricing. However, the relationship between corporate governance mechanism and earning management is significant. Moreover, after controlling the influence of earnings management, the relationship between corporate governance and the underpricing of IPOs remains.
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