The role of venture capital in merger and acquisition performance

He Song and Shan Wan

Applied Economics Letters, 2023, vol. 30, issue 6, 822-826

Abstract: We examine the effects of venture capital (VC) backing on the market responses to M&A events among a group of Chinese firms listed on ChiNext. We find a positive market response to M&A carried out by the companies backed by venture capital and this effect is robust after we address the endogeneity by employing Heckman two-stage approach. Our results support the notion that the involvement of VCs in their portfolio companies alleviates the information asymmetry problem.

Date: 2023
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DOI: 10.1080/13504851.2021.2024492

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