Abstract
This study investigates the potential effects of investment-banking reputation and venture capital on the long-term performance of initial public offerings (IPOs) simultaneously. Our findings do not support the view that IPOs perform differently compared with other firms, with the only exception of venture-backed IPOs. We show that venture-backed IPOs are associated with long-term gains when we account for investment bankers’ reputation, size and book-to-market effects. Zero investment portfolios, based on combinations of underwriter's reputation and venture capital involvement's in IPOs, provide additional evidence in support of the view that venture-backed IPOs, regardless of the reputation of underwriters, are associated with significant post-issue gains. Our results also indicate that the reputation of investment bankers matters only in the absence of venture capital.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.