시장조성제도와 풋백옵션 규제조치가 신규상장기업의 이익조정에 미치는 영향

This paper investigates the effect of market making and put-back option regulations on earnings management of IPO firms. The market making regulation requires a managing underwriter repurchase stocks when the stock price falls below 90% of offering price in early phase of IPO. This regulation was enacted to protect investors by allowing them to sell back their stocks to the underwriter and recover a substantial part of their initial investment. The put-back option regulation is similar to market making regulation but the regulation allows only individual investors to resell their stocks. The put-back option regulation is not so strict regulation as the market making regulation for a managing underwriter because the underwriter does not have responsibility to buy back stocks from institutional investors. If an underwriter is to be responsible for the market making when the IPO stock price drops, it will have both direct and indirect disadvantages. The underwriter has to spend a significant amount of money to repurchase IPO stocks from investors and would lose its reputation because it is assumed that the underwriter failed to evaluate the offering price properly. The offering price is determined largely based on profitability of IPO firms and earnings is a base number to estimate a firm’s profitability. Therefore, we expect the underwriter would influence IPO firms to restrain upward earnings management and avoid the potential risk of market making during the period of the regulations. We estimate IPO firms' earings management when the market making and put-back option regulations are repealed and compare it with the earnings management when those regulations are effective. We also compare the earings management during the period of market making regulation with that during the period of put-back option. This paper analyzes 481 IPO firms listed in KOSDAQ market from 2001 to 2010. The earnings management is estimated by discretionary accruals developed by Dechow et al.(1995) and Kothari et al.(2005). The results of this paper are as follows. First, IPO firms restrain upward earnings management when the market making or put-back option regulations are enforced. Second, IPO firms boost earnings more during the period of put-back option regulation than during the period of market making. The results confirm our anticipation that the regulations are effective to restrict earnings management and to protect investors. Underwriters influence IPO firms to produce reported earings more conservatively to alleviate their potential risk of market making obligation. Third, we did a few additional analysis as robustness checks. We include macro economic variables in the regression models to control market wide and economic conditions that may affect earnings management. Absolute value of discretionary accruals are used as a measure of earnings management in addition to raw number. Only sample firms having positive discretionary accruals are used in the analysis and investigate earnings management during the period of market making regulation. We also divide sample firms into large and small firms and investigate size effect on earnings management. All the robustness checks confirm and support our findings that the regulation restricts upward earings management of IPO firms.