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dc.contributor.authorBeuselinck, Christof
dc.contributor.authorDeloof, Marc
dc.contributor.authorManigart, Sophie
dc.date.accessioned2017-12-02T14:16:42Z
dc.date.available2017-12-02T14:16:42Z
dc.date.issued2004
dc.identifier.urihttp://hdl.handle.net/20.500.12127/1140
dc.description.abstractThis paper examines the quality of financial statements reported by private equity (PE) backed companies in the years around the initial PE investment. We study both pre- and post-investment earnings characteristics of a unique hand-collected sample of 556 Belgian unlisted companies, receiving PE financing between 1985 & 1999, and a matched non-PE backed sample. We find strong evidence of upward earnings management in the PE backed sample prior to the investment year, consistent with the hypothesis that entrepreneurs which apply for PE manage earnings upward to catch PE investors' interest. Further, PE backed companies show a significantly higher extent of earnings conservatism compared to matched companies from the investment year on, indicating a governance impact of PE investors on the financial reporting discipline. Finally, we find a marginally higher degree of earnings conservatism for companies receiving PE from non-government related investors compared to companies backed by government-related PE investors. We interpret this stricter financial reporting discipline as being the reflection of a more slack governance by government-related PE investors compared to non-government-related investors. Our results have implications for PE investors as well as for all other stakeholders of PE backed firms.
dc.language.isoen
dc.publisherVlerick Business School
dc.subjectCorporate Finance
dc.titleVenture Capital, Private Equity and Earnings Quality
refterms.dateFOA2019-10-14T12:44:42Z
dc.source.issue2
dc.source.numberofpages50
vlerick.knowledgedomainAccounting & Finance
vlerick.supervisor
vlerick.typecommWorking paper
vlerick.vlerickdepartmentA&F
dc.relation.urlhttp://public.vlerick.com/Publications/d555a0a5-69a9-e011-8a89-005056a635ed.pdf
dc.identifier.vperid80823
dc.identifier.vperid76909
dc.identifier.vperid35884
dc.identifier.vpubid1194


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