The role of venture capitalists in small and medium-sized enterprise initial public offerings: Evidence from China

Jiang, P.; Cai, C.X.; Keasey, K.; Wright, M.; Zhang, Q.

doi:10.1177/0266242613496262

The role of venture capitalists in small and medium-sized enterprise initial public offerings: Evidence from China

Jiang, P.; Cai, C.X.; Keasey, K.; Wright, M.; Zhang, Q.

Authors

P. Jiang

C.X. Cai

K. Keasey

M. Wright

Q. Zhang

Abstract

Despite the rapid growth and importance of small and medium-sized enterprises and the venture capital (VC) industry in China, this is the first article to examine comprehensively the role of VCs in public firms listed on the Small and Medium Enterprise Board and the Growth Enterprise Board. Supporting monitoring and certification hypotheses, the study finds that VC-backed initial public offerings have higher premiums, lower initial underpricing and higher subsequent market reaction. The grandstanding motive is documented for younger VCs which offer higher levels of initial underpricing to enhance their positions in the industry, but no evidence is found to support grandstanding by foreign VCs.

Citation

Jiang, P., Cai, C., Keasey, K., Wright, M., & Zhang, Q. (2014). The role of venture capitalists in small and medium-sized enterprise initial public offerings: Evidence from China. International Small Business Journal, 32(6), 619-643. https://doi.org/10.1177/0266242613496262

Journal Article Type	Article
Acceptance Date	Jun 3, 2013
Online Publication Date	Jul 30, 2014
Publication Date	Sep 1, 2014
Deposit Date	Dec 3, 2015
Publicly Available Date	Dec 4, 2015
Journal	International Small Business Journal
Print ISSN	0266-2426
Electronic ISSN	1741-2870
Publisher	SAGE Publications
Peer Reviewed	Peer Reviewed
Volume	32
Issue	6
Pages	619-643
DOI	https://doi.org/10.1177/0266242613496262
Keywords	China, Small and medium-sized enterprises financing, Underpricing, VC-backed IPO.
Public URL	https://durham-repository.worktribe.com/output/1417313

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Copyright Statement
Jiang, P. and Cai, C. X. and Keasey, K. and Wright, M. and Zhang, Q. (2014) 'The role of venture capitalists in small and medium-sized enterprise initial public offerings : evidence from China.', International small business journal., 32 (6). pp. 619-643. Copyright © 2014 The Author(s). Reprinted by permission of SAGE Publications.