An Empirical Study Of Venture Capital-backed IPO Underpring And Long-run Performance

IPO underpricing and long-run underperformance after IPO are two of the three hot issues in IPO research area. More and more scholars have pay attention to the effect of Venture Capital on the two issues. Due to the undeveloped stock market in China, there are not so many researches in this area. Recently, with the high growth of Chinese stock market, it is very meaningful to study on Venture Capital and the two issues. With the newest data from Chinese market, this article may have some new ideas on these issues, provide a better advice on investment strategy and improve the IPO market system.Base on the researches abroad and the history of Chinese stock market, this article has tried to find out the effect of Venture Capital has on the IPO underpricing and Long-run performance by using the data of273list companies in Small and Medium-sized Board from2004to2011.From the results, this study has following conclusions, firstly, all these stocks have a high IPO-underpricing and the Venture Capital-backed stocks have a higher one than non-Venture Capital-backed. Secondly, there are two years-underperformance in all these stocks, but there is a change for three years-performance. What's more, there are no differences between Venture Capital-backed stock and non-Venture Capital-backed in long-run performance. Finally, the Secondary stock market is very efficient to the issue of Venture Capital.