Grandstanding, certification and the underpricing of venture capital backed IPOs

• 成果类型: Article
• 署名作者: Lee, PM; Wahal, S
• 署名单位: Emory University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2003.09.003
• 发表日期: 2004
• 页码: 375-407
• 关键词: venture capital; ipos

摘要

We examine the role of venture capital backing in the Underpricing of IPOs. Controlling for endogeneity in the receipt of venture funding, we find that venture capital backed IPOs experience larger first-day returns than comparable non-venture backed IPOs. Between 1980 and 2000, the average return difference ranges from 5.01 percentage points to 10.32 percentage points. This return difference is particularly pronounced in the bubble period of 1999-2000. Consistent with the grandstanding hypothesis proposed by Gompers (J. Financial Econ. 42 (1996) 133), we find that higher underpricing leads to larger future flows of capital into venture capital funds, particularly after 1996. Cross-sectionally, the effect of underpricing is attenuated for younger venture capital firms and those that have previously conducted fewer IPOs. (C) 2004 Elsevier B.V. All rights reserved.