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Underpricing of corporate and independent venture capital-backed IPOs: Do they differ?

Author

Listed:
  • Fatima Shuwaikh
  • Emmanuelle Dubocage

    (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel)

  • Dennis Murer

Abstract

Building on a resource-based view, this study argues that independent venture capital (IVC) firms and corporate venture capital (CVC) firms have different impacts on the underpricing of their backed initial public offerings (IPOs). This is due to their different resources, motivations, and interests. Using a sample of 612 VC-backed IPOs from 2000 to 2020, we find a significant difference in underpricing among CVC- and IVC-backed IPOs. The matching method used by Megginson and Weiss (1991) and propensity score matching both show significant differences in underpricing between CVC-backed and IVC-backed IPOs. This paper shows that the difference in the influence of CVC and IVC backing on underpricing in IPOs has changed over time. While there was a significant difference from 2000–2009 in our models, this difference was no longer present in the more recent period of 2010–2020.

Suggested Citation

  • Fatima Shuwaikh & Emmanuelle Dubocage & Dennis Murer, 2023. "Underpricing of corporate and independent venture capital-backed IPOs: Do they differ?," Post-Print halshs-04711340, HAL.
    • Handle: RePEc:hal:journl:halshs-04711340
    DOI: 10.1007/s11156-023-01144-5
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