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Venture capitalist participation and the performance of Chinese IPOs
Isaac Otchere1; Anna P.I. Vong2
2016-12-01
Source PublicationEmerging Markets Review
ISSN1566-0141
Volume29Pages:226-245
Abstract

We examine the effects of venture capitalist participation in IPOs in China and find that VC-backed firms are more underpriced than non-VC firms. Both VC-backed and non-VC-backed IPOs experience long-run underperformance; however, VC-backed IPOs perform significantly better. The higher level of underpricing and cost of going public for the VC-backed firms are consistent with the monitoring role of the VC. Finally, the fact that VC reputation is associated with lower underpricing is consistent with the reputational capital theory, which asserts that reputable VCs use their expertise and experience to minimize underpricing in order to preserve their reputational capital.

KeywordChina Initial Public Offering Reputational Capital Structural Power Venture Capital
DOIhttps://doi.org/10.1016/j.ememar.2016.08.010
URLView the original
Indexed BySSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance ; Economics
WOS IDWOS:000390509500011
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Citation statistics
Cited Times [WOS]:10   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Faculty of Business Administration
Faculty of Education
Corresponding AuthorIsaac Otchere; Anna P.I. Vong
Affiliation1.Sprott School of Business, Carleton University, Ottawa, Canada
2.University of Macau, Macao
Corresponding Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Isaac Otchere,Anna P.I. Vong. Venture capitalist participation and the performance of Chinese IPOs[J]. Emerging Markets Review,2016,29:226-245.
APA Isaac Otchere,&Anna P.I. Vong.(2016).Venture capitalist participation and the performance of Chinese IPOs.Emerging Markets Review,29,226-245.
MLA Isaac Otchere,et al."Venture capitalist participation and the performance of Chinese IPOs".Emerging Markets Review 29(2016):226-245.
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