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Exchange listing type and firm financial reporting behavior

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  • Lin, Wen-Chun
  • Liao, Tsai-Ling

Abstract

We examine the link between the choice of firms to switch exchanges and managers' financial reporting behavior, and the impact of this link on post-listing performance. Among three types of exchange listings, NASDAQ-to-AMEX firms report significantly higher pre-listing abnormal accruals than do NASDAQ-to-NYSE and AMEX-to-NYSE firms. The pre-listing abnormal accruals are negatively associated with the post-listing performance, with the association driven mainly by NASDAQ-to-AMEX firms. These results suggest that the type of listing change affects managers' reporting behavior in the sense that the switch to an exchange with stricter listing standards appears to mitigate managerial incentives to inflate reported earnings.

Suggested Citation

  • Lin, Wen-Chun & Liao, Tsai-Ling, 2015. "Exchange listing type and firm financial reporting behavior," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 234-249.
    • Handle: RePEc:eee:reveco:v:38:y:2015:i:c:p:234-249
    DOI: 10.1016/j.iref.2015.02.030
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    1. Lin, Wen-Chun & Liao, Tsai-Ling, 2018. "Managerial reporting behavior around exchange switching: Consideration of current and future performance," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 218-237.

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    More about this item

    Keywords

    Exchange listings; Listing requirements; Discretionary accruals;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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