Abstract
European venture capital has gained increasing interest in the latest years by academics, practitioners and policy makers: its relevance in this area has been growing, and firms located in European countries have attracted a substantial share of the investments. Traditionally the literature identifies venture capital (VC) as the form of investment in start-up and growth companies, which is particularly fitted to overcome the asymmetries of information characterizing new businesses and firms which are living a series of changes (Gompers, 1995; Brav and Gompers, 1997). VC is also able to boost the performance of the target companies thanks to its value-added services, in terms both of sales growth and employment (Grilli and Murtinu, 2014; Paglia and Harjoto, 2014) and of stock performance (Bessler and Seim, 2012), or with reference to corporate governance (Farag et al., 2014), although the real contribution of VC might depend on the context (Rosenbusch et al., 2013).
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Akyol, A.C., T. Cooper, M. Meoli, and S. Vismara (2014) ‘Do regulatory changes affect the underpricing of European IPOs?’, Journal of Banking and Finance, 45: 43–58.
Alperovych, Y., and G. Hübner (2011) ‘Explaining returns on venture capital companies: evidence from Belgium’, Research in International Business and Finance, 25: 277–95.
Banerjee, S., L. Dai, and K. Shrestha (2011) ‘Cross-country IPOs: what explains differences in underpricing?’, Journal of Corporate Finance, 17: 1289–305.
Barry, C.B., C.J. Muscarella, J.W. Peavy III, and M.R. Vetsuypens (1990) ‘The role of venture capital in the creation of public companies’, Journal of Financial Economics, 27: 447–71.
Basu, S., C. Phelps, and S. Kotha (2011) ‘Towards understanding who makes corporate venture capital investments and why’, Journal of Business Venturing, 26: 153–71.
Belghitar, Y., and R. Dixon (2012) ‘Do venture capitalists reduce underpricing and underperformance of IPOs?’, Applied Financial Economics, 22(1): 33–44.
Benveniste, L., and P. Spindt (1989) ‘How investment bankers determine the offer price and allocation of new issues’, Journal of Financial Economics, 24: 343–61.
Bessler, W., and M. Seim (2012) ‘The performance of venture-backed IPOs in Europe’, Venture Capital, 14(4): 215–39.
Boulton, T.J., S.B. Smart, and C.J. Zutter (2010) ‘IPO underpricing and international corporate governance’, Journal of International Business, 41: 206–22.
Brander, J.A., Q. Du, and T. Hellmann (2014) ‘The effects of government-sponsored venture capital: international evidence’, Review of Finance, doi:10.1093/ rol/rlu009.
Brau, J., R.A. Brown, and J.S. Osteryoung (2004) ‘Do venture capitalists add value to small manufacturing firms? An empirical analysis of venture and nonven-ture capital-backed initial public offering’, Journal of Small Business Management, 42(1): 78–92.
Brav, A., and P.A. Gompers (1997) ‘Myth or reality? The long-run underperform-ance of initial public offerings: evidence from venture and nonventure capital-backed companies’, The Journal of Finance, 52(4): 1791–821.
Brennan, M.J., and J.R. Franks (1997) ‘Underpricing, ownership and control in initial public offerings of equity securities in the UK’, Journal of Financial Economics, 45(3): 391–413.
Chemmanur, T.J., and E. Loutskina (2006) ‘The role of venture capital backing in initial public offerings: certification, screening, or market power?’, EFA 2005 Moscow Meetings Paper.
Chen, G., M. Firth, and J.B. Kim (2004) ‘IPO underpricing in China’s new stock markets’, Journal of Multinational Financial Management, 14: 283–302.
Coackley, J., L. Hadass, and A. Wood (2004) ‘Post-IPO operating performance, venture capitalists and market timing’, Journal of Business Finance and Accounting, 34(9–10): 1423–46.
Coackley, J., L. Hadass, and A. Wood (2009) ‘UK IPO underpricing and venture capitalists’, European Journal of Finance, 15(4): 421–35.
Cumming, D., G. Fleming, and A. Schwienbacher (2006) ‘Legality and venture capital exits’, Journal of Corporate Finance, 12(2): 214–45.
da Rin, M., F. Hellman, and M. Puri (2013) ‘A survey of venture capital research’ in G. Constantinides, M. Harris, and R. Stulz (eds), Handbook of the Economics of Finance, Amsterdam: North Holland.
da Silva Rosa, R., G. Velayuthen, and T. Walter (2003) ‘The sharemarket performance of Australian venture capital-backed and non-venture capital-backed IPOs’, Pacific-Basin Finance Journal, 11: 197–218.
Engelen, P.J., and M. van Essen (2010) ‘Underpricing of IPOs: firm-, issue- and country-specific characteristics’, Journal of Banking and Finance, 34: 1958–69.
Fama, E., and K. French (1993) ‘Common risk factors in the returns on stocks and bonds’, Journal of Financial Economics, 33: 3–56.
Farag, H., C. Mailin, and K. Ow-Yong (2014) ‘Governance, ownership structure, and performance of entrepreneurial IPOs in AIM companies’, Corporate Governance, 22(2): 100–15.
Gompers, P. (1995) ‘Optimal Investment, Monitoring, and the Staging of Venture Capital’, Journal of Finance, 50 (5): 1461–89.
Gompers, P. (1996) ‘Grandstanding in the venture capital industry’, Journal of Financial Economics, 42: 133–56.
Grilli, L., and S. Murtinu (2014) ‘Government, venture capital and the growth of European high-tech entrepreneurial firms’, Research Policy, 43: 1523–43.
Ibbotson, R., and J.R. Ritter (1995) ‘Initial public offerings’, in R. Jarrow et al., (eds), Handbook in OR & MS, vol. 9.
Jain, B., and O. Kini (1999) ‘The life cycle of initial public ollering firms’, Journal of Business Finance and Accounting, 26: 1281–307.
Jain, B., and O. Kini (2000) ‘Does the presence of venture capitalists improve the survival profile of IPO firms?’, The Journal of Business Finance and Accounting, 27(9–10): 1139–83.
Krishnan, C.N.V., V.I. Ivanov, R.W. Maulis, and A.K. Singh (2009) ‘Venture capital reputation, post-ipo performance and corporate governance’, Journal of Financial and Quantitative Analysis, 46(5): 1295–323.
Megginson, W.L., and K.A. Weiss (1991) ‘Venture capitalist certification in initial public offerings’, Journal of Finance, 46: 879–903.
Mello, A.S., and J.E. Parsons (1998) ‘Going public and the ownership structure of the firm’, Journal of Financial Economics, 49(1): 79–109.
Paglia, J.K., and M.A. Harjoto (2014) ‘The effects of private equity and venture capital on sales and employment growth in small and medium-sized businesses’, Journal of Banking and Finance, 47: 177–97.
Ritter, J.R. (1984) ‘The hot issue market of 1980’, Journal of Business, 57: 215–40.
Ritter, J.R., and I. Welch (2002) ‘A review of IPO activity, Pricing and Allocations’, Journal of Finance, 57(4): 1795–828.
Rock, K. (1986) ‘Why new issues are underpriced’, Journal of Financial Economics, 15: 187–212.
Rosenbusch, N., J. Brinckmann, and V. Mueller (2013) ‘Does venture capital pay off? A meta-analysis on the relationship between venture capital investment and firm performance’, Journal of Business Venturing, 28(3): 335–53.
Song, S., J.S. Tan, and Y. Yi (2014) ‘IPO initial returns in China: Underpricing or overvaluation?’, China Journal of Accounting Research, 7: 31–49.
Welch, I. (1992) ‘Sequential sales, learning, and cascades’, Journal of Finance, 47: 695–732.
Zingales, L. (1995) ‘Insider ownership and the decision to go public’, Review of Economic Studies, 62(212): 425–48.
Editor information
Editors and Affiliations
Copyright information
© 2015 Luisa Anderloni and Alessandra Tanda
About this chapter
Cite this chapter
Anderloni, L., Tanda, A. (2015). The Performance of Listed European Innovative Firms. In: Beccalli, E., Poli, F. (eds) Lending, Investments and the Financial Crisis. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9781137531018_7
Download citation
DOI: https://doi.org/10.1057/9781137531018_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-56498-9
Online ISBN: 978-1-137-53101-8
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)