Emprical Study On Venture Capital Participation's Influcence To Listed Companies In SME Board

Underpricing in IPO is one of hot spots in modern finance study research, scholars both at home and abroad had made a series of researches about the factors which influence underpricing in IPO .Venture capital also gradually is integrated in recent years by more and more scholars,but there has not formed the unified conclusion about the venture capital participation, there are two conclusions which are widely accepted by scholars:certification/supervision effect and adverse selection/grandstanding effect. Demestic empirical study about the venture capital's influence to the IPO is quite few.This study purposes to examine the effect which venture capital to IPO underpricing in small and medium-sized enterprises (smes) board. Using samples of small and medium-sized enterprises board of listed companies between June 1, 2004 and December 31, 2009, we find that the involvement of venture capital do not reduce the unit issuing expenses, on the contray, the unit issuing expenses is higher than the companies which is not backed by venture capital. Moreover, our results shows that companies backed by venture capital have higher underpricing in IPO. In the market of small and medium-sized enterprises board, venture capital's participation has manifested adverse selection/grandstanding effect but not played the certification/supervision role. Based on the conclusion, we put forward some suggestions about the development of venture capital and listed companies on small and medium enterprises board and GEM.