The effects of venture capital syndicate diversity on earnings management and performance of IPOs in the US and UK: An institutional perspective (Peer Reviewed)

S. Chahine; J. Arthurs; Igor Filatotchev; R. Hoskisson

doi:10.1016/j.jcorpfin.2011.11.007

The effects of venture capital syndicate diversity on earnings management and performance of IPOs in the US and UK: An institutional perspective (Peer Reviewed)

S. Chahine, J. Arthurs, Igor Filatotchev, R. Hoskisson

Publikation: Wissenschaftliche Fachzeitschrift › Originalbeitrag in Fachzeitschrift › Begutachtung

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Abstract

This study examines the extent to which principal-principal agency conflicts within venture capital (VC) syndicates lead to additional principal-agent conflicts in IPO firms in two institutional contexts. Using a matched sample of 274 VC-backed IPOs in the US and the UK, it shows that the diversity of a VC syndicate increases pre-IPO discretionary current accruals, used as a proxy for earnings management, but the impact of such diversity is higher in the US. There
is also evidence of higher underpricing and lower aftermarket performance in firms with higher
earnings management and VC diversity, and these negative performance effects are also higher in the US. Our findings indicate that local and informal institutions have a significant effect on multiple agency conflicts in IPO firms and performance outcomes.

Originalsprache	Englisch
Seiten (von - bis)	179 - 192
Fachzeitschrift	Journal of Corporate Finance
Jahrgang	18
Ausgabenummer	1
DOIs	https://doi.org/10.1016/j.jcorpfin.2011.11.007
Publikationsstatus	Veröffentlicht - 1 März 2012

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The effects of venture capital syndicate diversity on earnings management and performance of IPOs in the US and UK: An institutional perspective (Peer Reviewed). / Chahine, S.; Arthurs, J.; Filatotchev, Igor et al.
in: Journal of Corporate Finance, Jahrgang 18, Nr. 1, 01.03.2012, S. 179 - 192.

Publikation: Wissenschaftliche Fachzeitschrift › Originalbeitrag in Fachzeitschrift › Begutachtung

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