After controlling for the effect of parent banks’ (PBs) direct ownership, we find that investment by bank-affiliated venture capitals (BVCs) is positively associated with the probability that investee firms have loan balances with PBs in the year they issue an IPO. However, BVCs typically sell off their holdings of investee firms within 2 years after the IPO. Furthermore, the level of BVC ownership does not have explanatory power regarding whether investee firms have loans from PBs. On the contrary, PBs’ direct shareholdings have a positive association with the probability that investee firms have PB loans for many years after IPOs.
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