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Underpricing of venture backed IPOs: a meta-analysis approach

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  • Alessandra Tanda
  • Giancarlo Manzi

Abstract

Listing firms are subject to underpricing mainly because of asymmetries of information, but IPOs backed by a venture capitalist are generally found to be subject to less underpricing. Although this condition is commonly verified by the empirical evidence, a consistent number of studies finds contrasting results. This paper aims to answer to the question: do venture capitalists effectively reduce underpricing at IPO? Evidence provides a negative answer, with venture-backed IPOs having higher underpricing especially in US markets. Meta-regression results confirm the different effect of VC between US and European IPOs. Results overall suggest that other explanations on underpricing might hold in US markets.

Suggested Citation

  • Alessandra Tanda & Giancarlo Manzi, 2020. "Underpricing of venture backed IPOs: a meta-analysis approach," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 29(4), pages 331-348, May.
    • Handle: RePEc:taf:ecinnt:v:29:y:2020:i:4:p:331-348
    DOI: 10.1080/10438599.2019.1625154
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    Cited by:

    1. Xu, Runguo & Dong, Peng, 2023. "Underwriter reputation and asset-backed securitization pricing," Finance Research Letters, Elsevier, vol. 58(PB).
    2. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    3. Luisa Anderloni & Ornella Moro & Alessandra Tanda, 2020. "Governance and Performance in Insurance Companies: A Bibliometric Analysis and A Meta-Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(11), pages 1-1, November.

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