The effects of R&D, venture capital, and technology on the underpricing of IPOs in Taiwan

The effects of R&D, venture capital, and technology on the underpricing of IPOs in Taiwan Information asymmetry and value uncertainty causes high -research and development (R&D) or high-tech Initial Public Offerings (IPOs) to become underpriced. Venture capital can serve as a moderator to mitigate the information asymmetry and value uncertainty to reduce IPO underpricing. High-tech industries significantly contribute to Taiwan’s economic growth. With the unique Taiwan data, we find that venture-backed IPOs are less underpriced. More importantly, IPO underpricing due to technology decreases with the use of venture capital and decreases with the interaction between R&D expenditure and technology. Technology requirement reduces the underpricing of high-R&D IPOs. Accordingly, R&D spending reduces the underpricing of high-tech IPOs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

The effects of R&D, venture capital, and technology on the underpricing of IPOs in Taiwan

Loading next page...
 
/lp/springer_journal/the-effects-of-r-d-venture-capital-and-technology-on-the-underpricing-0Bo6zSlBUp
Publisher
Springer US
Copyright
Copyright © 2011 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-011-0259-7
Publisher site
See Article on Publisher Site

Abstract

Information asymmetry and value uncertainty causes high -research and development (R&D) or high-tech Initial Public Offerings (IPOs) to become underpriced. Venture capital can serve as a moderator to mitigate the information asymmetry and value uncertainty to reduce IPO underpricing. High-tech industries significantly contribute to Taiwan’s economic growth. With the unique Taiwan data, we find that venture-backed IPOs are less underpriced. More importantly, IPO underpricing due to technology decreases with the use of venture capital and decreases with the interaction between R&D expenditure and technology. Technology requirement reduces the underpricing of high-R&D IPOs. Accordingly, R&D spending reduces the underpricing of high-tech IPOs.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Oct 18, 2011

References

  • Allocations, adverse selection, and cascades in IPOs: evidence from the Tel Aviv stock exchange
    Amihud, Y; Hauser, S; Kirsh, A
  • Why do venture capital firms exist? Theory and Canadian evidence
    Amit, R; Brander, J; Zott, C
  • Is R&D always beneficial?
    Chang, HL; Su, CW
  • The underpricing and excess returns of initial public offerings in Taiwan based on noisy trading: a stochastic frontier model
    Chen, A; Hung, CC; Wu, CS
  • IPO anomalies and innovation capital
    Chin, CL; Lee, P; Kleinman, G
  • The separation of ownership and control in East Asian Corporations
    Claessens, S; Djankov, S; Lang, L
  • Explaining the short- and long-term IPO anomalies in the US by R&D
    Guo, RJ; Lev, B; Shi, C
  • The impacts of R&D investment on company performance: US vs. Taiwanese technology-intensive industry
    Han, I; Chuang, CM

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches

$49/month

Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.

$588

$360/year

billed annually
Start Free Trial

14-day Free Trial