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

Krishnan, C. N. V.; Ivanov, Vladimir I.; Masulis, Ronald W.; Singh, Ajai K.

doi:10.1017/s0022109011000251

Cited by 383 publications

(221 citation statements)

References 75 publications

(110 reference statements)

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“…Thus, they play an important monitoring role in the firms in which they invest due to their concern for their own reputation (Gompers, 1995;Engel et al, 2002;Hochberg, 2008). Recently, Krishnan, Ivanov, Masulis and Singh (2011) find that having reputable PEs plays an active monitoring role in the post-IPO period, resulting in better post-IPO performance than that of other IPOs in the US market. However, in contrast to developed countries, the monitoring role of PE in China is expected to be impaired because PE investors normally hold only a small portion of shares compared to the powerful controlling shareholders.…”

Section: Introductionmentioning

confidence: 99%

Does Political Capital Create Value in the IPO Market? Evidence from China

2014

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This study examines the value of political capital in the Chinese IPO market. We find a positive relationship between a politically connected executive and the probability of IPO approval of entrepreneurial firms. We further identify that shareholders value those connections and give a market premium to connected firms after the firms go public. We provide evidence that other types of political capital gained through external sources, such as politically connected sponsors and PE investors, also bring benefits to the firms in their IPO approval, and these connections substitute for the effect of the executive's political connections on IPO approval. We argue that in emerging markets where government intervention is still prevalent, political capital does create value and entrepreneurial firms usually build political capital to facilitate their access to the IPO market, although other types of political capital do not bring further benefits into the post-IPO market. ABSTRACTThis study examines the value of political capital in the Chinese IPO market. We find a positive relationship between a politically connected executive and the probability of IPO approval of entrepreneurial firms. We further identify that shareholders value those connections and give a market premium to connected firms after the firms go public. We provide evidence that other types of political capital gained through external sources, such as politically connected sponsors and PE investors, also bring benefits to the firms in their IPO approval, and these connections substitute for the effect of the executive's political connections on IPO approval. We argue that in emerging markets where government intervention is still prevalent, political capital does create value and entrepreneurial firms usually build political capital to facilitate their access to the IPO market, although other types of political capital do not bring further benefits into the post-IPO market.

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Section: Introductionmentioning

confidence: 99%

Does Political Capital Create Value in the IPO Market? Evidence from China

2014

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“…Another theory suggests that renowned private equity firms diligently select and filter their portfolio companies according to strict quality criteria in the first place (Krishnan et al, 2009). Consequently private equity backed IPOs in the US show higher performance levels than their non-backed counterparts.…”

Section: Long Run Performance Of Sponsor-backed Iposmentioning

confidence: 99%

Market Performance of Sponsor-Backed Initial Public Offerings: An Empirical Analysis of the German Market

Maximilian¹,

Gupta²

2018

JEPF

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“…***/**/* indicates statistical significance at the 1%/5%/10% level. Following Bell, Moore, & Filatotchev (2012) and Krishnan et al (2011), who both examined the post IPO performance and its dependence on corporate governance variables, we expect that the level of corporate governance has also an influence on the going private decision of a firm. Corporate governance plays a relevant role for various stakeholders, especially investors.…”

Section: Lifecycle Stage and The Likelihood Of Becoming A Going Privatementioning

confidence: 99%

The firm lifecycle as a determiant of going private decisions

Gutsche

Schroeter

2017

Int. conf. adv. bus. manag. law

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We examine the impact of corporate lifecycle on the likelihood of becoming a voluntary going private firm. We apply the firm's capital mix as a measure for the stage in a firm's lifecycle. In doing so, we provide a framework and evidence on firm characteristics of going private firms. We find that the decision to go private depends on the firm's lifecycle. Young firms, with low retained earnings are more likely to go private than mature or old firms. We also find that relative firm characteristics of going private and non-going private firms are consistent with the findings on relative firm characteristics in M & A activity research for acquirers (bidders, non-targets) vs. nonacquirer (non-bidders, and targets) and that these relative firm characteristics of going private and non-going private firms stay constant throughout all stages of the corporate lifecycle.

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

Cited by 383 publications

References 75 publications

Does Political Capital Create Value in the IPO Market? Evidence from China

Does Political Capital Create Value in the IPO Market? Evidence from China

Market Performance of Sponsor-Backed Initial Public Offerings: An Empirical Analysis of the German Market

The firm lifecycle as a determiant of going private decisions

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