The dark side of independent venture capitalists: Evidence from Japan

Yue Sun, Konari Uchida, Mamoru Matsumoto

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Using Japanese firms that went public during the period 1998-2006, we find that independent venture capitalist-backed IPO firms are significantly younger and smaller than IPO companies backed by venture capital firms that are subsidiaries of financial institutions. IPOs backed by independent venture capitalists also tend to use less reputable underwriters and go public on stock exchanges with less strict listing requirements due to their immaturity. Young and small IPO companies experience significantly greater underpricing and poorer long-term operating performance. Taken all together, independent venture capitalists make lower quality companies go public than finance-affiliated venture capitalists.

Original languageEnglish
Pages (from-to)279-300
Number of pages22
JournalPacific Basin Finance Journal
Volume24
DOIs
Publication statusPublished - Sep 1 2013

Fingerprint

Japan
Venture capitalists
Operating performance
Underpricing
Financial institutions
Underwriters
Stock exchange
Venture capital firms
Japanese firms
Public finance
Subsidiaries

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

The dark side of independent venture capitalists : Evidence from Japan. / Sun, Yue; Uchida, Konari; Matsumoto, Mamoru.

In: Pacific Basin Finance Journal, Vol. 24, 01.09.2013, p. 279-300.

Research output: Contribution to journalArticle

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