Heterogeneous venture capital, M&A activity, and market response

Wanli Li, Ting Cao and Zhaozhen Feng

Emerging Markets Review, 2016, vol. 29, issue C, 168-199

Abstract: This study investigates the effects of venture capital (VC) investment on newly listed firms' merger and acquisition activities and takes the lock-up period into consideration. We find that venture capitalists (VCs) tend to postpone M&A activities during a lock-up period, whereas the inhibition role recedes when the lock-up period expires. VCs with a longer investment period dominate this influence. We also illustrate how the market responds to the M&A announcements of VC-backed firms, with the response varying with VCs' investment period.

Keywords: Venture capital; Investment period; M&A (search for similar items in EconPapers)
JEL-codes: G24 G34 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:29:y:2016:i:c:p:168-199

DOI: 10.1016/j.ememar.2016.08.008

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