Venture Capital And The Performance Change Of IPO Stocks

IPO performance deterioration phenomenon has been troubling the healthy development of China's capital market.Domestic and foreign scholars have explained the IPO performance deterioration from the perspectives of investor sentiment,issuance system,financial intermediaries,earnings management of enterprises,etc.,but there are few relevant studies from the perspective of venture capital institutions.In recent years,the proportion of venture capital participation in a-share listed enterprises has increased,and the participation of these institutional investors has boosted the development of the multi-level capital market.Therefore,this paper studies the IPO performance deterioration from the perspective of venture capital institutions.Domestic and foreign scholars explain the functions of venture capital institutions with different theories,such as grandstanding effect,certification,cultivation,monitoring function and so on.Starting from the reputation of venture capital,this paper studies whether the participation of venture capital has an impact on the company's performance after listing,and further studies whether the reputation of venture capital has a significant impact on the company's performance.In this paper,the data of the gem market from 2014 to 2016 were selected as samples,and the empirical test was conducted through the cross-section multiple regression model.It was found that the long-term performance of the companies with venture capital participation in the listing was significantly lower than that of the companies without venture capital support.Further examination found that the higher the reputation,the better the long-term performance of the venture-backed company.In this paper,the endogeneity test was carried out through the Probit model to ensure the accuracy of the conclusion.The empirical results are consistent with the hypothesis above,that is,there is a Grandstanding effect in China's venture capital industry.This paper studies the reputation of venture capital from a new perspective and makes a new explanation for IPO performance change.In addition,this paper adopts the venture capital reputation measurement method in line with the Chinese market situation,conducts empirical tests on the new data,and supplements the domestic research on the name by name theory.The conclusion of this paper can promote the attention of venture capital institutions to reputation accumulation and provide a new perspective for enterprises to choose venture capital.