Underpricing of corporate and independent venture capital-backed IPOs: Do they differ?

Fatima Shuwaikh (), Emmanuelle Dubocage () and Dennis Murer ()
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Fatima Shuwaikh: Léonard de Vinci Pôle Universitaire Research Center
Emmanuelle Dubocage: Paris-Est Créteil University
Dennis Murer: Universidade Católica Portuguesa

Review of Quantitative Finance and Accounting, 2023, vol. 60, issue 4, No 13, 1629-1650

Abstract: Abstract Building on a resource-based view, this study argues that independent venture capital (IVC) firms and corporate venture capital (CVC) firms have different impacts on the underpricing of their backed initial public offerings (IPOs). This is due to their different resources, motivations, and interests. Using a sample of 612 VC-backed IPOs from 2000 to 2020, we find a significant difference in underpricing among CVC- and IVC-backed IPOs. The matching method used by Megginson and Weiss (1991) and propensity score matching both show significant differences in underpricing between CVC-backed and IVC-backed IPOs. This paper shows that the difference in the influence of CVC and IVC backing on underpricing in IPOs has changed over time. While there was a significant difference from 2000–2009 in our models, this difference was no longer present in the more recent period of 2010–2020.

Keywords: Initial public offering; Corporate venture capital; Independent venture capital; Underpricing (search for similar items in EconPapers)
JEL-codes: G24 G32 G34 L21 L26 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11156-023-01144-5

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