scholarly journals A Social Network Analysis on Venture Capital Alliance’s Exit from an Emerging Market

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-10
Author(s):  
Jing Wu ◽  
Chuan Luo ◽  
Ling Liu
Keyword(s):  
Venture Capital ◽  
Initial Public Offering ◽  
Capital Market ◽  
Value Chain ◽  
Emerging Market ◽  
Enterprise Development ◽  
Short Term ◽  
Enterprise Value ◽  
Public Offering ◽  
Positive Effect

This study investigated the impacts of network structure on a venture capital (VC) alliance’s successful exit from an emerging market by empirically analyzing joint VC data in China. We find that, compared to a mature capital market, the mechanism not only has a certain commonality but also shows the emerging market’s particularities. From the commonality perspective, the mechanism has a positive effect on successful exit by obtaining heterogeneity information. These particularities are manifested in the following three aspects. First, the mechanism is not conducive to deepening the enterprise value chain to establish credibility by obtaining short-term cash during an initial public offering with the enhancement of the VC alliance’s intervention ability for enterprise development. In addition, a VC alliance’s independent judgment is bound by the VC market. Furthermore, the problem of over-trust in investees reduces the likelihood of a VC alliance’s successful exit. Therefore, we should pay more attention to the particularity of emerging markets such as China to improve the relevant management mechanism.

scholarly journals Corporate governance and IPO underpricing: evidence from the italian market

2021 ◽  
Author(s):  
Emanuele Teti ◽  
Ilaria Montefusco
Keyword(s):  
Corporate Governance ◽  
Initial Public Offering ◽  
Boards Of Directors ◽  
Stock Option ◽  
Board Members ◽  
Ipo Underpricing ◽  
Italian Market ◽  
Public Offering ◽  
The Impact ◽  
Positive Effect

AbstractThis paper aims to analyse the impact of firms’ corporate governance characteristics on the degree of first-day returns (i.e., underpricing) in the Italian initial public offering (IPO) market. In particular, this work investigates the impacts of the characteristics of boards of directors (BoDs) and ownership structure on the underpricing of newly offered shares. By studying a sample of 128 Italian IPOs between 2000 and 2016, it is concluded that corporate governance characteristics affect the degree of first-day returns following a company’s IPO. More specifically, the size of the BoD negatively affects underpricing, while the ownership of institutional investors and board members has a positive effect on the degree of underpricing. Conversely, no significant evidence is found with regard to board independence, the number of female directors in the boardroom, the implementation of stock option plans and ownership concentration.

scholarly journals An empirical study of IPO underpricing: Evidence from Chinese stock market

2014 ◽  
Vol 12 (1) ◽  
pp. 139-152 ◽  
Author(s):  
Tianxiang Xu ◽  
Yujie Zhao
Keyword(s):  
Empirical Study ◽  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Chinese Stock Market ◽  
Short Term ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Public Offering ◽  
Different Characteristics

Initial public offerings, as one of the most important activities for firms, have raising massive amount of researches. Regarding China, the stock markets are experiencing a massive level of IPO underpricing, which leads to trillions of dollars leaved on the table. This study is conducted for the question why Chinese IPO are so heavily underpriced and the determinants of IPO underpricing, also the possibility of IPO be underpriced in China. We confirm again that Chinese IPOs are heavily underpriced and the average underpricing level is about 110%. Further, Chinese IPO will experience a negative short term return starting from 10 days after listing, and there are significantly different characteristics for state owned IPOs and private IPOs. This study finds that information asymmetry, proportion of state owned share and risk are the mainly determinants of IPO underpricing in China. Additionally, one of the biggest reason that Chinese initial public offering is underpriced so much is because of government participation, since we find that firms with larger proportion of government state owned shares will be more underpriced.

scholarly journals Comparison of the theoretical and practical approaches to funding through the IPO way in the Czech capital market

2008 ◽  
Vol 56 (6) ◽  
pp. 59-68
Author(s):  
Tomáš Meluzín
Keyword(s):  
Initial Public Offering ◽  
Capital Market ◽  
Western Europe ◽  
The United States ◽  
Bank Loans ◽  
Professional Literature ◽  
Mortgage Crisis ◽  
The Usa ◽  
Eastern European Countries ◽  
Public Offering

Funding development of the company through the “Initial Public Offering” has a high representation globally, the Czech Republic unlike, and belongs to traditional methods of raising funds necessary for development of business in the developed capital markets. In the United States of America, Japan and in the Western Europe countries the method of company funding through IPO has been applying for several decades already. The first public stock offerings began to be applied in these markets in higher volumes from the beginning of the 60th of the last century. From that period importance of IPO goes up globally and the initial public stock offerings begin to be applied more and more even in the Central and Eastern European countries. In the conditions of the Czech capital market it is possible to identify only few companies, who attempted to funding through the IPO way at present. Greater part of the Czech companies still undergo the debit funding for financing their further development, namely in the form of bank loans. At the same time it is necessary to take into account, that the debit financing starts, thanks to so-called mortgage crisis in the USA, causing problems and mark up. Admittance of a stakeholder into the company is not convenient for all and thus IPO represents an interesting option of how to acquire a no arrear capital. The aim of this article is to determine the IPO concept, analyse its development at the world stockholder markets, describe the reasons for IPO implementation according to the contemporary professional literature and compare it with the approaches to this particular form of funding with companies that have already implemented IPO at the Czech capital market.

scholarly journals Exit Decision of Venture Capital Based on Linear Contract in Continuous Time: IPO or M&A

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-19
Author(s):  
Ding Chuan ◽  
Dahai Li ◽  
Meishu Ye
Keyword(s):  
Social Welfare ◽  
Venture Capital ◽  
Interest Rates ◽  
Initial Public Offering ◽  
Continuous Time ◽  
Production Efficiency ◽  
Venture Capitalists ◽  
Social Welfare Maximization ◽  
Incentive Problem ◽  
Public Offering

Based on the assumption that the long-term value of a venture capital satisfies the algebraic Brownian motion, we develop a continuous-time exit model of venture capital under different exit modes, namely, initial public offering (IPO) and mergers and acquisitions (M&A). The employee incentive problem is analyzed jointly with the exit decision of the firm in terms of the exit timing and the exit mode. Further, the problem of capital exit is considered from two perspectives, namely, optimal venture capital and social welfare maximization, and the differences between these exit decisions are compared. Our model predicts that the timing of an IPO, the purpose of which is to maximize the utility of the capitalists, lags behind the exit timing, whose purpose is to maximize social welfare. Using a numerical analysis, this paper also proves that increasing the production efficiency, lowering the interest rates, and improving risk management can make the exit decision of venture capitalists converge with that of maximizing social welfare.

scholarly journals Does Leverage Constrain Real and AEM Around IPO Corporate Event? Evidence from the Emerging Market

2019 ◽  
Vol 20 (2) ◽  
pp. 354-367
Author(s):  
Sani Hussaini Kalgo ◽  
Bany-Ariffin A.N. ◽  
Hairul Suhaimi Bin Nahar ◽  
Bolaji Tunde Matemilola
Keyword(s):  
Earnings Management ◽  
Initial Public Offering ◽  
Emerging Market ◽  
Order Theory ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Cross Sectional ◽  
Pecking Order Theory ◽  
Public Offering ◽  
The Impact

The article investigates whether Malaysian initial public offering (IPO) firms engage in real and accrual earnings management (AEM) and examines the impact of leverage on the earnings management’s discretionary behaviour of the firms for the period of 2003–2013. The Dechow, Sloan, and Sweeney (1995, The Accounting Review, 70[2], 193–225) cross-sectional modified Jones model was used to estimate discretionary accruals, while Roychowdhury’s (2006, Journal of Accounting and Economics, 42[3]), 335–370) cross-sectional models were used to investigate abnormal real activity discretionary behaviour. The results indicate Malaysian IPO firms engage in real and accrual discretionary behaviour. The graphical presentations of the earnings’ management proxies indicate higher real and AEM for high-leverage firms. Similarly, the multivariate analysis indicates a positive relationship between leverage and earnings management, which is in tandem with the agency cost of free cash flow theory and debt hypothesis. It is also consistent with the pecking-order theory of capital structure. This study suggests that regulatory agencies and standard setters should continue to improve quality of accounting reports in order to protect investors’ invested capital.

Venture Capital Reputation, Post-IPO Performance, and Corporate Governance

2011 ◽  
Vol 46 (5) ◽  
pp. 1295-1333 ◽  
Author(s):  
C. N. V. Krishnan ◽  
Vladimir I. Ivanov ◽  
Ronald W. Masulis ◽  
Ajai K. Singh
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Venture Capital ◽  
Market Share ◽  
Initial Public Offering ◽  
Performance Measures ◽  
Ipo Performance ◽  
The Past ◽  
Long Run ◽  
Public Offering

AbstractWe examine the association of a venture capital (VC) firm’s reputation with the post-initial public offering (IPO) long-run performance of its portfolio firms. We find that VC reputation, measured by the past market share of VC-backed IPOs, has significant positive associations with long-run firm performance measures. While more reputable VCs initially select better-quality firms, more reputable VCs continue to be associated with superior long-run performance, even after controlling for VC selectivity. We find that more reputable VCs exhibit more active post-IPO involvement in the corporate governance of their portfolio firms, and this continued VC involvement positively influences post-IPO firm performance.

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