Venture Capital，Innovation and Post-IPO Performance
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| Title | Venture Capital，Innovation and Post-IPO Performance
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| Author | Zhang Xueyong and Zhang Yeqing |
| Organization | Central University of Finance and Economics；Tsinghua University School of Economics and Management |
| Email | zxy_616@163.com；cufezyq@163.com |
| Key Words | Venture Capital；Innovation；IPO；Performance |
| Abstract | Though researchers have confirmed that VC-backed IPOs would exhibit outstanding performance, there is little in the extant literature about the in-depth reason of that phenomenon. From the view of firm innovation, we analyze the impact of VC-backed firms’ innovative ability on their post-IPO performance based on the data of China A-Share Market between 2003 and 2012. We have three baseline findings. First, VC can improve the innovation of firms before their IPOs. Second, within the class of VC-backed firms, firms which possessed granted patents before IPO would show lower underpricing level and higher long-term return compared with the ones without granted patents. Third, firms lacking in innovation perform similarly with non-venture capital-backed firms. In short, innovation has a strikingly positive influence on the performance of VC-backed IPOs and the establishment of innovation is actually the essence for venture capital-backed firms to obtain better performance. |
| Serial Number | WP972 |
| Time | 2015-12-04 |
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