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Family Ownership, Related-Party Transactions and Earnings Quality

Author

Listed:
  • Sa’adiah Munir

    (School of Business, Monash University Sunway Campus, Jalan Lagoon Selatan, 46150 Bandar Sunway, Selangor)

  • Norman Mohd Saleh

    (School of Accounting, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Selangor)

  • Romlah Jaffar

    (School of Accounting, Faculty of Economics and Management, Universiti Kebangsaan Malaysia, 43600 Bangi, Selangor)

  • Puan Yatim

    (Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 Bangi, Selangor)

Abstract

This paper examines the aftermarket trading volume following an initial public offering (IPO) in a sample of 243 IPOs listed on Bursa Malaysia between June 2003 and June 2008. Specifically, this study investigates the degree of flipping activity and its relationship with six ex-ante variables including IPO initial returns. Consistent with previous studies, the result of the cross-sectional multiple regression reveals a significantly strong positive relationship between initial returns and flipping activity for IPOs. Initial returns also seem to influence the subsequent week’s trading volume, but the influence is completely absorbed by flipping activity. The results also show that both institutional investor participation and offer size have significant influences on flipping activity. The results of this study imply that the Malaysian IPO market experiences active flipping activity that, in turn, has a significant role in predicting the subsequent trading activity.

Suggested Citation

  • Sa’adiah Munir & Norman Mohd Saleh & Romlah Jaffar & Puan Yatim, 2013. "Family Ownership, Related-Party Transactions and Earnings Quality," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 9(1), pages 129-153.
    • Handle: RePEc:usm:journl:aamjaf00901_129-153
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    Citations

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    Cited by:

    1. Mohd Mohid Rahmat & Kamran Ahmed & Gerald J. Lobo, 2020. "Related Party Transactions, Value Relevance and Informativeness of Earnings: Evidence from Four Economies in East Asia," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 1-42, March.
    2. Giovanna Gavana & Pietro Gottardo & Anna Maria Moisello, 2022. "Related Party Transactions and Earnings Management: The Moderating Effect of ESG Performance," Sustainability, MDPI, vol. 14(10), pages 1-21, May.
    3. Mohd Taufik Mohd Suffian & Zuraidah Mohd Sanusi & Mohd Shatari Abd Ghafar & Effiezal Aswadi Abd Wahab, 2018. "Managing Related Party Transactions on Earnings Quality," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 8(1), pages 484-496, January.

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