The dark side of independent venture capitalists: Evidence from Japan

Yue Sun, Konari Uchida and Mamoru Matsumoto

Pacific-Basin Finance Journal, 2013, vol. 24, issue C, 279-300

Abstract: Using Japanese firms that went public during the period 1998–2006, we find that independent venture capitalist-backed IPO firms are significantly younger and smaller than IPO companies backed by venture capital firms that are subsidiaries of financial institutions. IPOs backed by independent venture capitalists also tend to use less reputable underwriters and go public on stock exchanges with less strict listing requirements due to their immaturity. Young and small IPO companies experience significantly greater underpricing and poorer long-term operating performance. Taken all together, independent venture capitalists make lower quality companies go public than finance-affiliated venture capitalists.

Keywords: Independent venture capitalist; Finance-affiliated venture capitalist; IPO; Underpricing; Long-term performance (search for similar items in EconPapers)
JEL-codes: G24 G32 (search for similar items in EconPapers)
Date: 2013
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:pacfin:v:24:y:2013:i:c:p:279-300

DOI: 10.1016/j.pacfin.2013.02.001

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