Enterprises’ R&D Investment, Venture Capital Syndication and IPO Underpricing

Xuemeng Guo, Kai Li, Siyi Yu and Bolu Wei
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Xuemeng Guo: School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China
Kai Li: School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China
Siyi Yu: SNDU Group Company Limited, Beijing 100022, China
Bolu Wei: School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China

Sustainability, 2021, vol. 13, issue 13, 1-17

Abstract: Based on the data of companies that got ChiNext listed from 2009 to 2018, this paper empirically studies the relationship among R&D investment, venture capital (VC) syndication and IPO underpricing. It is found that there is a significant positive correlation between R&D investment and IPO underpricing, indicating that the higher the R&D investment is, the higher the IPO underpricing degree is; the intervention of VC syndication plays a role of “adverse selection” instead of giving play to its advantages of sharing information, which intensifies the positive correlation between R&D investment and IPO underpricing. Further analysis shows that the reputation of the leading VC in syndication can play a negative regulating role; the higher the reputation of the leading VC is, the more it can play the “certification effect”, reduce the information asymmetry caused by R&D investment, therefore alleviating the IPO underpricing caused by R&D investment.

Keywords: R&D investment; IPO underpricing; venture capital; syndication (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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