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Venture Capital And The Long-run Performance Of Initial Public Offerings Of The Companies Listed On Chinaís Growth Enterprise Board

Posted on:2018-10-20Degree:MasterType:Thesis
Country:ChinaCandidate:Y DingFull Text:PDF
GTID:2359330542467510Subject:Financial master
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Since the Growth Enterprise Board was established officially on October 30,2009,the small and medium-sized,innovative and high-tech enterprises located by the GEB have carried out Initial Public Offerings constantly on the board,including many venture-backed firms.Venture capital firms are playing more and more important roles before IPOs,during IPOs and after IPOs of the enterprises.The study on the impact of venture capital on the long-run performance of IPO of the GEB companies has great theoretical and practical meaning.It can perfect the GEB IPO systems and accelerate the development of Chinaís venture capital industry.In the part of the review of the literature and the theoretical studies,the paper firstly makes a generalization and summarization of the domestic and foreign relevant research on the long-run underperformance of initial public offerings and the effect of venture capital.Then the paper has a theoretical explanation and analysis on the phenomenon of the long-run underperformance of initial public offerings of the public companies from three perspectives(the perspectives of Earnings Management,Heterogeneous Expectation and Windows of Opportunity).The paper makes a theoretical analysis on the influence of venture capital on the invested enterprises from four VC Effect hypothesizes(the certification hypothesis,the supervision hypothesis,the adverse selection hypothesis and the grandstanding hypothesis).Finally the paper puts forward corresponding research hypothesis according to the relevant theoretical research and combined with the current development situation of the capital market and the venture capital industry in China.In the part of empirical research,the paper focuses on the Chinaís Growth Enterprise Board and takes the IPO enterprises that have gone public on the GEB during June 25,2010 to October 9,2012 as research samples,using BHAR(Buy-and-Hold Abnormal Returns)as a measure of long-term abnormal returns.In the first place,the paper tests if the long-run underperformance of initial public offerings exits in Chinaís GEB.The empirical results indicate that the underperformance of IPO exits after the companies have gone public for one year,the 2-year BHAR after going public is not significantly different with the analogical enterprisesí.But the 3-year BHAR after going public is significantly more than zero.Then according to if there are venture capital firms in the top ten shareholders of the sample companies before their IPOs,the paper divides all the sample companies into VC group(venture companies)and Non-VC group(Non-venture companies).The paper tests the effect of the venture capitals on the public companies by using independent-samples T test,the research shows that the average BHAR of the companies in the VC group is worse than what in the Non-VC group.On this basis,the paper tests the specific effect of the features of the venture capitals(venture capital reputation,shareholding ratio and single or joint investment)on the long-run performance of the companies using venture firms as samples.The empirical results show that the higher the reputation of the venture capital is,the higher the BHAR of the invested enterprises is.But the higher the shareholding ratio of the venture capital is,the lower the BHAR of the invested enterprises is.If there are more than two venture capital firms makes no difference to the performance of the invested enterprises.At last,the paper takes the ordinary companies and venture-backed companies as samples respectively and builds the forecasting regression models of IPO long-run abnormal return.According to the results of the regression analysis,the participation of venture capital has a negative effect on the invested companies and the higher the shareholding ratio of the venture capital is,the stronger the negative effect is.If there are more than two venture capital firms makes no difference to the performance of the invested enterprises.But the higher the reputation of the venture capital is,the stronger the positive effect is.The earnings management of the public companies the year before IPO makes remarkable negative effect on the long-run performance of IPO and the number of the board of directors also makes negative effect on the performance but the result is not remarkable when the paper takes the ordinary enterprises as samples.However,the negative effect of earnings management is not remarkable but the negative effect of the number of board of directors is remarkable when the paper takes the venture-backed enterprises as samples.Based on the analysis of research results,the paper puts forward relevant policy suggestions in order to accelerate the development of the venture capital industry in China,regulate and perfect the development of Chinaís Growth Enterprise Market orderly.
Keywords/Search Tags:Venture Capital, Reputation, BHAR, IPO Effect, Earnings Management
PDF Full Text Request
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