IDEAS home Printed from https://ideas.repec.org/a/taf/rcjaxx/v6y2018i4p527-554.html
   My bibliography  Save this article

Economic consequences of administrative penalties on violations by IPO sponsor representatives

Author

Listed:
  • Yang Yi
  • Hanyi Tian
  • Shunlin Song
  • Jinsong Tan

Abstract

It is a crucial issue in the theory and practice of securities regulation, to improve regulation of securities institutions and avoid securities fraud. Using IPO sponsor supervision data by the China Securities Regulatory Commission (CSRC) for the period 2004 to 2015, we analyse the economic consequences of administrative penalty on the sponsor representative level. We find that violating sponsor representatives undertake fewer IPO projects, receive IPO projects of a smaller size and receive lower issuing fees after a penalty from the CSRC, compared with other sponsor representatives. Meanwhile, we also find that violating sponsor representatives significantly improve the quality of IPO projects undertaken after a penalty, which is reflected in lower earnings management and higher profitability of these IPO projects. Our results indicate that an administrative penalty can not only effectively punish the violations, which affects sponsor representatives’ income as a result, but also significantly improves the competence of violating sponsor representatives. Our research has confirmed the effectiveness of an administrative penalty and is helpful in further improving financial regulatory enforcement and related systems.

Suggested Citation

  • Yang Yi & Hanyi Tian & Shunlin Song & Jinsong Tan, 2018. "Economic consequences of administrative penalties on violations by IPO sponsor representatives," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 6(4), pages 527-554, October.
    • Handle: RePEc:taf:rcjaxx:v:6:y:2018:i:4:p:527-554
    DOI: 10.1080/21697213.2019.1612190
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/21697213.2019.1612190
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/21697213.2019.1612190?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rcjaxx:v:6:y:2018:i:4:p:527-554. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rcja .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.