1,721,219 research outputs found
Venture capitalists, business angels, and performance of entrepreneurial IPOs in the UK and France
No full textUsing a unique sample of 444 entrepreneurial IPOs in the UK and France, this paper analyses the investment patterns and the stock-market performance effects of two types of early stage investors: venture capitalists (VCs) and business angels (BAs). Extending existing research, we identify important endogeneity and institutional effects. Our findings indicate that UK IPOs have a higher retained ownership and lower participation ratio by BAs, but a lower retained ownership and participation ratio by VCs than in France. BA and VC investments are substitutes, and they are endogenously determined by a number of firm- and founder-related factors, such as founder ownership and external board 'interlocks', and underwriter reputation. UK VCs are effective third-party certifying agents who reduce underpricing in UK IPOs, whereas in French IPOs they increase it by appearing to engage in grandstanding. This certification effect is more significant in UK IPOs involving both high VC and BA ownership. Finally, underpricing increases with VC participation ratio, where the higher exit of VCs seems to increase the risk premium required by outside investors, in particular in the UK. © 2007 Blackwell Publishing Ltd.AERNOUDT R, 2001, BUSINESS ANGELS MAGA; BARRY CB, 1990, J FINANC ECON, V27, P447, DOI 10.1016-0304-405X(90)90064-7; ARMOUR J, 2006, IN PRESS OXFORD EC P; BAKER M, 2003, J LAW ECON, V46, P1097; BHAGAT S, 2004, UNPUB DETERMINANTS I; BIRLEY S, 2000, BLACKWELL HDB ENTERP; Black BS, 1998, J FINANC ECON, V47, P243, DOI 10.1016-S0304-405X(97)00045-7; Certo ST, 2001, STRATEGIC MANAGE J, V22, P641, DOI 10.1002-smj.182; CHAHINE S, 2006, IN PRESS INT REV FIN; CHAHINE S, 2005, VENTURE CAPITALISTS; CUMMING DJ, 2006, IN PRESS J CORPORATE; CUMMING DJ, 2003, CONTRACTS EXITS VENT; CUMMINGS DJ, 2004, LEGALITY VENTURE GOV; EHRLICH SB, 1994, J BUS VENTURING, V9, P67, DOI 10.1016-0883-9026(94)90027-2; Espenlaub S., 1999, VENTURE CAPITAL INT, V11, P325, DOI 10.1080-136910699295848; *EVCA, 2003, EVCA YB 2003; FIET JO, 1995, J MANAGE STUD, V32, P551, DOI 10.1111-j.1467-6486.1995.tb00788.x; Filatotchev I, 2006, SMALL BUS ECON, V26, P337, DOI 10.1007-s11187-005-2051-3; Filatotchev I., 2005, LIFE CYCLE CORPORATE; FILATOTCHEV I, 2002, STRATEGIC MANAGEMENT, V28, P941; FRANCIS B, 2000, UNDERPRICING VENTURE; FREEAR J, 1994, J BUS VENTURING, V9, P109, DOI 10.1016-0883-9026(94)90004-3; Giudici G., 2004, RISE FALL EUROPES NE; Goergen M, 2006, J BUS FINAN ACCOUNT, V33, P79, DOI 10.1111-j.1468-5957.2006.00657.x; GOMPERS PA, 1995, J FINANC, V50, P1461; GORMAN M, 1989, J BUS VENTURING, V4, P231, DOI 10.1016-0883-9026(89)90014-1; Granlund M, 1996, BRIT J DEV DISABIL, V42, P1; Habib MA, 2001, REV FINANC STUD, V14, P433, DOI 10.1093-rfs-14.2.433; Hellmann G, 2002, INT POLITIK, V57, P1; HOCHBERG YV, 2003, VENTURE CAPITAL CORP; Jelic R, 2005, J BUS FINAN ACCOUNT, V32, P643, DOI 10.1111-j.0306-686X.2005.00608.x; Jeng Leslie A., 2000, J CORP FINANC, V6, P241, DOI DOI 10.1016-S0929-1199(00)00003-1; JENSEN MC, 1976, J FINANC ECON, V3, P305, DOI 10.1016-0304-405X(76)90026-X; Johnson S, 2000, AM ECON REV, V90, P22, DOI 10.1257-aer.90.2.22; KAPLAN S, 2004, LEGAL DIFFERENCES LE; Kaplan SN, 2003, REV ECON STUD, V70, P281, DOI 10.1111-1467-937X.00245; LaPorta R, 1997, J FINANC, V52, P1131; Larcker D. F., 2005, USE INSTRUMENTAL VAR; LEE PM, 2003, AC MAN ANN C SEATTL; LELAND HE, 1977, J FINANC, V32, P371, DOI 10.2307-2326770; Lerner J., 1999, VENTURE CAPITAL CYCL; LERNER J, 1995, J FINANC, V50, P301, DOI 10.2307-2329247; Lerner J, 1998, J BANK FINANC, V22, P773, DOI 10.1016-S0378-4266(98)00043-0; LERNER J, 1994, FINANC MANAGE, V23, P16, DOI 10.2307-3665618; Lins KV, 2003, J FINANC QUANT ANAL, V38, P159, DOI 10.2307-4126768; Lockett A, 2001, OMEGA-INT J MANAGE S, V29, P375, DOI 10.1016-S0305-0483(01)00024-X; Lockett A, 2002, RES POLICY, V31, P1009, DOI 10.1016-S0048-7333(01)00174-3; Macmillan I.C., 1985, J BUSINESS VENTURING, V1, P119, DOI DOI 10.1016-0883-9026(85)90011-4; Manigart S., 2000, EUROPEAN FINANCIAL M, V6, P389, DOI 10.1111-1468-036X.00130; MEGGINSON W, 1991, J FINANC, V96, P879; Prowse S, 1998, J BANK FINANC, V22, P785, DOI 10.1016-S0378-4266(98)00044-2; RINDERMAN G, 2003, VENTURE CAPITALIST P; RITTER JR, 1984, J FINANC, V39, P1231, DOI 10.2307-2327627; Sapienza HJ, 1996, J BUS VENTURING, V11, P439, DOI 10.1016-S0883-9026(96)00052-3; SAPIENZA HJ, 1994, ACAD MANAGE J, V37, P1618, DOI 10.2307-256802; van Osnabrugge M., 1998, ENTREP THEORY PRACT, V22, P23; Wong A., 2002, ANGEL FINANCE OTHER; Wright M, 2003, J MANAGE STUD, V40, P2073, DOI 10.1046-j.1467-6486.2003.00412.x; Wright M., 1998, J BUSINESS FINANCE A, V25, P521, DOI 10.1111-1468-5957.00201; Zahra S. A., 2004, J MANAGE STUD, V41, P88330282
Building Perceived Quality of Founder-Involved IPO Firms: Founders' Effects on Board Selection and Stock Market Performance
No full textResearch on governance has focused on large corporations, giving far less attention to smaller and younger companies especially those moving from founder-controlled start-ups to professionally managed public companies. Emphasizing founder-involved firms (i.e., firms that are floated by their original founders), this article examines interlinks between founders' prestige and selection of inside and outside directors, and short-term performance measured in terms of IPO underpricing. The results provide evidence of positive association between founders' and directors' prestige, but there is substitution between inside and outside directors' prestige. Top management team's external board experiences reduce IPO underpricing. © 2009 Baylor University.AMIT R, 1990, MANAGE SCI, V36, P1232; BARRY CB, 1990, J FINANC ECON, V27, P447, DOI 10.1016-0304-405X(90)90064-7; Arthurs JD, 2008, ACAD MANAGE J, V51, P277; BEATTY RP, 1986, J FINANC ECON, V15, P213, DOI 10.1016-0304-405X(86)90055-3; BEATTY RP, 1994, ADMIN SCI QUART, V39, P313, DOI 10.2307-2393238; Brennan MJ, 1997, J FINANC ECON, V45, P391, DOI 10.1016-S0304-405X(97)00022-6; Brooks C., 2002, INTRO ECONOMETRICS F; Carpenter MA, 2003, STRATEGIC MANAGE J, V24, P803, DOI 10.1002-smj.338; CARTER R, 1990, J FINANC, V45, P1045, DOI 10.2307-2328714; Certo ST, 2003, ACAD MANAGE REV, V28, P432; Certo T. S., 2001, ENTREP THEORY PRACT, V25, P33; CHAHINE S, 2008, J MULTINATIONAL FINA, V18, P180, DOI 10.1016-j.mulfin.2007.08.001; Chahine S, 2007, J BUS FINAN ACCOUNT, V34, P505, DOI 10.1111-j.1468-5957.2007.02045.x; Chahine S., 2004, FINANCIAL MARKETS PO, V18, P143, DOI 10.1007-s11408-004-0203-0; Coakley J, 2009, EUR J FINANC, V15, P421, DOI 10.1080-13518470802560915; Cohen BD, 2005, STRATEGIC MANAGE J, V26, P683, DOI 10.1002-smj.463; Daily C. M., 1992, J SMALL BUS MANAGE, V30, P25; Daily CM, 2003, ENTREP THEORY PRACT, V27, P271, DOI 10.1111-1540-8520.t01-1-00004; Deeds D. L., 1998, ENTREP THEORY PRACT, V22, P55; Filatotchev I., 2008, GLOBAL FINANCE J, V18, P351, DOI 10.1016-j.gfj.2007.03.001; Filatotchev I, 2002, STRATEGIC MANAGE J, V23, P941, DOI 10.1002-smj.269; Finkle T.A., 1998, ENTREP THEORY PRACT, V22, P5; Ford R. H., 1988, ENTREP THEORY PRACT, P49; Geletkanycz MA, 1997, ADMIN SCI QUART, V42, P654, DOI 10.2307-2393653; Higgins MC, 2006, STRATEGIC MANAGE J, V27, P1, DOI 10.1002-smj.495; Higgins MC, 2003, ORGAN SCI, V14, P244, DOI 10.1287-orsc.14.2.244.15160; Jain BA, 2001, J BUS RES, V52, P223, DOI 10.1016-S0148-2963(99)00112-5; Jayraman N., 2000, STRATEGIC MANAGEMENT, V21, P1215; Loughran T., 2003, WHY HAS IPO UNDERPRI; MCBAIN ML, 1989, J BUS VENTURING, V4, P419, DOI 10.1016-0883-9026(89)90011-6; MICHAELY R, 1994, REV FINANC STUD, V7, P279, DOI 10.1093-rfs-7.2.279; Mikkelson WH, 1997, J FINANC ECON, V44, P281, DOI 10.1016-S0304-405X(97)00006-8; Nelson T, 2003, STRATEGIC MANAGE J, V24, P707, DOI 10.1002-smj.328; O'Brien RM, 2007, QUAL QUANT, V41, P673, DOI 10.1007-s11135-006-9018-6; PFEFFER J, 1972, ACAD MANAGE J, V15, P317, DOI 10.2307-254856; Ritter JR, 2002, J FINANC, V57, P1795, DOI 10.1111-1540-6261.00478; Sanders G. W., 2004, STRATEGIC MANAGEMENT, V25, P167; Staiger D, 1997, ECONOMETRICA, V65, P557, DOI 10.2307-2171753; Steier L, 2000, ORGAN STUD, V21, P163, DOI 10.1177-0170840600211002; Welbourne TM, 1996, ACAD MANAGE J, V39, P891, DOI 10.2307-256716; WILLARD GE, 1992, J BUS VENTURING, V7, P181, DOI 10.1016-0883-9026(92)90025-M; Zajac EJ, 1996, ADMIN SCI QUART, V41, P507, DOI 10.2307-239394064
Corporate Governance in IPOs
Full text linkIt is increasingly recognized in the management literature that the initial public off ering
(IPO) is an important stage in the life cycle of privately held and entrepreneurial fi rms.
At this critical juncture, a fi rm has overcome the fi rst challenges of its entrepreneurial
phase and entered a growth stage. As Fama and French ( 2004 : 229) emphasize, an IPO
“is the point of entry that gives fi rms expanded access to equity capital, allowing them to
emerge and grow.” An IPO can provide an entrepreneurial fi rm with critical resources
for its future expansion. It can also provide the entrepreneur with the fi rst substantive
access to cash from their investment of time and resources in the entrepreneurial eff ort.
Despite the growing awareness of the importance of IPOs among both academics and
the investor community, the process by which a privately held fi rm transforms itself into
a publicly traded company is still not well understood. While numerous studies have
investigated the determinants of the going public decision (e.g. Booth and Smith, 1986 ;
Jain and Kini, 1999 ) and post-issue performance (e.g. Beatty and Ritter, 1986 ; Brav,
Geczy, and Gompers, 2000 ; Espenlaub and Tonks, 1998 ; Michaely and Shaw, 1994 ), there
is relatively little research on the related but equally important issue of what factors
infl uence the corporate governance mechanism of a fi rm at IPO stage, and how the specifi
c characteristics of this mechanism such as board composition, executive incentives,
and ownership interests of private equity investors may aff ect the IPO’s performance
FDI by Firms from Newly Industrialized Economies in Emerging Markets: Corporate Governance, Entry Mode and Location
No full textNetwork positioning and R&D activity: a study of Italian groups
No full textNetwork positioning and R&D activity: a study of Italian group
Performance enhancing strategies in emerging market firms: a study of product diversification, international iversification and innovation
No full textPerformance enhancing strategies in emerging market firms: a study of product diversification, international diversification and innovation
No full textGovernance, ownership structure, and performance of IPO firms: The impact of different types of private equity investors and institutional environments
No full textThis paper examines performance effects of ownership concentration and two types of private equity investors (venture capitalists and business angels) in firms that have recently undergone an initial public offering (IPO) in the United Kingdom and France. We expand and contextualize nascent understanding of multiple agency theory by examining heterogeneity of private equity investors and by suggesting that multiple agency relationships are affected by different institutional contexts. We employ a unique, hand-collected dataset of 224 matched IPOs (112 in each country). Controlling for the endogeneity of private equity investors' retained share ownership, we find support for the agency theory argument that concentrated ownership improves IPOs' performance. The research also shows that the two types of private equity investors have a differential impact on performance, and the legal institutions in a given country moderate this impact. 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