Consistent with allegations that high stock-based compensation levels in the 1990s led managers to boost the stock price by manipulating earnings before selling stock, we find that: managers tended to inflate earnings before selling stock; during 1997-2000, firms we identify as managing earnings the most experienced returns 21% higher than firms managing earnings the least; and stocks of firms where insiders sold the most stock rose 59% higher than stocks where insiders sold the least. Furthermore, stock corrections after the bubble burst are strongly negatively associated with estimated levels of earnings management and insider selling during the bubble.
| Speaker: | Dr Steven J HUDDART Professor, The Pennsylvania State University |
| When: |
10.30 am - 12.00 pm |
| Venue: | School of Accountancy [Map] Level 4, Meeting Room 4.1 |
| Contact: | Office of the Dean Email: SOAR@smu.edu.sg |