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Article: Public Market Players in the Private World: Implications for the Going-Public Process

TitlePublic Market Players in the Private World: Implications for the Going-Public Process
Authors
Issue Date2021
PublisherOxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/
Citation
The Review of Financial Studies, 2021, v. 34 n. 5, p. 2411-2447 How to Cite?
AbstractWe investigate the effect of pre-IPO investments by public market institutional investors (institutions) on the exit of venture capitalists (VCs). Results indicate that institutions’ pre-IPO investments reduce IPO underpricing by mitigating VCs’ reliance on all-star analysts to boost market liquidity. We conclude that institutions facilitate VC exits in the secondary market. Supporting this view, our analysis reveals that the presence of institutions allows VCs to exit with a reduced price impact in the secondary market. Consistent with the ease of exit, VCs offer fewer shares at the IPO and are more likely to invest in institutionally backed startups.
Persistent Identifierhttp://hdl.handle.net/10722/284498
ISSN
2023 Impact Factor: 6.8
2023 SCImago Journal Rankings: 17.654
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorHuang, S-
dc.contributor.authorMao, Y-
dc.contributor.authorWang, CR-
dc.contributor.authorZhou, D-
dc.date.accessioned2020-08-07T08:58:31Z-
dc.date.available2020-08-07T08:58:31Z-
dc.date.issued2021-
dc.identifier.citationThe Review of Financial Studies, 2021, v. 34 n. 5, p. 2411-2447-
dc.identifier.issn0893-9454-
dc.identifier.urihttp://hdl.handle.net/10722/284498-
dc.description.abstractWe investigate the effect of pre-IPO investments by public market institutional investors (institutions) on the exit of venture capitalists (VCs). Results indicate that institutions’ pre-IPO investments reduce IPO underpricing by mitigating VCs’ reliance on all-star analysts to boost market liquidity. We conclude that institutions facilitate VC exits in the secondary market. Supporting this view, our analysis reveals that the presence of institutions allows VCs to exit with a reduced price impact in the secondary market. Consistent with the ease of exit, VCs offer fewer shares at the IPO and are more likely to invest in institutionally backed startups.-
dc.languageeng-
dc.publisherOxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/-
dc.relation.ispartofThe Review of Financial Studies-
dc.titlePublic Market Players in the Private World: Implications for the Going-Public Process-
dc.typeArticle-
dc.identifier.emailHuang, S: huangsy@hku.hk-
dc.identifier.authorityHuang, S=rp02052-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1093/rfs/hhaa092-
dc.identifier.scopuseid_2-s2.0-85105685392-
dc.identifier.hkuros312014-
dc.identifier.hkuros312010-
dc.identifier.volume34-
dc.identifier.issue5-
dc.identifier.spage2411-
dc.identifier.epage2447-
dc.identifier.isiWOS:000647646500006-
dc.publisher.placeUnited Kingdom-
dc.identifier.issnl0893-9454-

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