The effect of lockup on management earnings forecasts disclosure in French IPOs
Research output: Contribution to journal › Article
This study investigates the effect of lockup agreements on management earnings forecasts in initial public offering (IPO) prospectuses. Using a sample of 312 French firms that went public over the period 1997–2016, we find that IPOs with lockup agreements are more likely to disclose conservative earnings forecasts. In particular, we provide evidence that IPOs with more locked-up shares and those selecting longer lockup periods, have more accurate management earnings forecasts. In other words, managers of firms with a higher proportion of shares locked up and longer lockup agreements experience greater costs of non-diversification of idiosyncratic risk. They tend, thus, to provide more conservative and accurate forecasts to prevent costs arising from earnings forecast error. These results are robust to a number of sensitivity tests.
| Original language | English |
|---|---|
| Number of pages | 23 |
| Journal | Journal of Management and Governance |
| Early online date | 5 Jul 2019 |
| DOIs | |
| Publication status | Early online - 5 Jul 2019 |
Documents
- ALLAYA_2019_cright-student_JMG_The Effect of Lockup on Management Earnings Forecasts Disclosure in French IPOs
Rights statement: This is a post-peer-review, pre-copyedit version of an article published in Journal of Management and Governance. The final authenticated version is available online at Springer via http://dx.doi.org/10.1007/s10997-019-09477-x.
Accepted author manuscript (Post-print), 446 KB, PDF document
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