Business, Management and Accounting
4 years ago

Venture capital backing reduces underpricing of Italian IPOs, benefiting investors.

1 view
RePEc: Research Papers in Economics
The causal effect of venture capital backing on the underpricing of Italian IPOs
Luca Pennacchio

Paper Summary

Venture capital backing reduces the underpricing of Italian IPOs between 1999 and 2012. This is because venture capitalists certify the value of issuing firms, reducing the information gap in the IPO process. The study used matching and regression methods to show that venture capital backing causes this effect, rather than just being a coincidence.

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