The impact of financial forecasts regulation on IPO anomalies: Evidence from Taiwan

Ya Fang Wang, Picheng Lee, Chen Lung Chin, Gary Kleinman

Research output: Contribution to journalArticle

5 Scopus citations


This study examines whether a regulation on mandatory disclosure of financial forecasts since June 1991 and further sanction imposition since March 1998 contribute to lower IPO firms’ initial and aftermarket returns, and shorten honeymoon periods. The study is based on 423 IPO firms after the regulation required them to disclose their forecasts and 53 IPO firms prior to the regulation. The findings report that initial and aftermarket returns are lower, and honeymoon periods are shorter in the post-regulation period than those in the pre-regulation. The findings also report that initial and aftermarket returns are relatively smaller, and the honeymoon periods are shorter after the March 1998 regulatory sanction was imposed after controlling other variables. These results document that the financial forecasts disclosure regulation evidently contributes to mitigating information asymmetry.

Original languageEnglish
Pages (from-to)146-166
Number of pages21
JournalJournal of Financial Regulation and Compliance
Issue number2
Publication statusPublished - 1 Jan 2005



  • Financial forecasts
  • IPO anomalies
  • Mandatory
  • Regulation

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