Joint Venture Capital And Corporate Post-IPO Returns

In recent years,China has vigorously developed innovation and entrepreneurship,and start-ups have sprung up like mushrooms after a spring rain.However,in the harsh competitive environment,many start-ups die prematurely before they have hatched results,and venture capital is a key catalyst for incubating startups with high growth potential.In addition to providing financial support,venture capital can also provide management and value-added services to promote the development and growth of start-ups.In the context of the steady development of my country’s venture capital industry,more and more IPO companies have the support of venture capital institutions behind them.At present,there are a lot of literatures on the impact of venture capital into the enterprise’s business performance,enterprise innovation,enterprise IPO underpricing rate and other aspects.Few scholars have studied the return on stock after IPO from the perspective of joint venture capital.Therefore,this paper will study whether joint venture capital will affect the return rate of enterprises after IPO,and analyze and explore its impact mechanism.This paper uses the data of China’s Shanghai and Shenzhen A-share IPO companies from January 1,2011 to December 31,2019 to study whether joint venture capital affects the return rate of enterprises after IPO,and its impact mechanism and enterprise characteristics.The moderating effects are discussed.Specifically,this paper finds:(1)There is a positive correlation between joint venture capital and the return rate after IPO.This paper adopts the definition of joint venture capital by Lu Yao et al.(2017),and constructs joint venture capital dummy variables as explanatory variables based on the data of sample companies.Using Zhang Xueyong and Zhang Yeqing’s(2016)measure of the company’s stock return,BHAR(t),as the explained variable,and adding a series of company-level control variables,this paper studies the impact of joint venture capital on the return of companies after IPO.The empirical results show that joint venture capital has a significant promoting effect on the return rate after IPO.This is because after the joint venture capital provides various value-added services for the invested companies,it promotes the increase of the value of the invested companies and makes the invested companies perform better in the stock market after listing.This conclusion still holds after replacing the explanatory and explanatory variables,PSM kernel matching and Heckman two-stage method to eliminate selection bias.(2)Joint venture capital affects the return rate after IPO through the mechanism of enterprise innovation,that is,joint venture capital can improve the innovation ability of the invested company,thereby making the invested company’s stock return after IPO higher.Referring to the practice of Cao(2013),Zhang Xueyong and Zhang Yeqing(2016),this paper uses the number of patents granted by the State Intellectual Property Office at the time of IPO as an intermediary variable to measure corporate innovation,and uses the mediation effect test method(Wen Zhonglin and Ye Baojuan,2014)Do an empirical test.The empirical results show that joint venture capital can improve the innovation ability of the invested companies,thereby improving the return rate after the IPO,and there is a partial intermediary effect.(3)The different characteristics of enterprises play a moderating role in the process of joint venture capital affecting the return rate of enterprises after IPO.This paper studies the moderating effects of enterprise R&D foundation,enterprise operating performance,enterprise financing level,and enterprise actual controller’s ownership.The moderating variable and the explanatory variable are used to construct an interaction term,and whether there is a moderating effect is studied according to the coefficient of the constructed interaction term.The empirical results show that corporate R&D foundation,corporate operating performance,corporate financing level,and corporate actual controller ownership all play a moderate role in the process of joint venture capital affecting the post-IPO rate of return.The main innovations of this paper are as follows:(1)Research from the relatively novel starting point of joint venture capital.Unlike most of the existing literature considering the existence of venture capital,we consider the impact of joint venture capital investment on the invested company.The impact is mainly the return of joint venture capital to the invested company after IPO Is there a promotion effect.(2)Analyze the impact mechanism of joint venture capital from the perspective of enterprise innovation.Taking corporate innovation as an intermediary variable,we use the impact mechanism of joint venture capital to promote corporate innovation and then promote the return rate after IPO to explain the impact of joint venture capital on the return rate of invested companies after IPO.(3)Consider whether there is an adjustment effect from the perspective of the characteristics of the invested enterprises.From the perspective of different characteristic variables of the invested companies,such as the company’s research and development foundation,corporate operating performance,corporate financing level,and the ownership of the actual controller of the company,it is considered whether there is a moderating effect.