Journal of Service Science and Management

Volume 11, Issue 6 (December 2018)

ISSN Print: 1940-9893   ISSN Online: 1940-9907

Google-based Impact Factor: 1.25  Citations  h5-index & Ranking

Technology, R & D and IPO Underpricing: The Moderator Effect of Venture Capital

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DOI: 10.4236/jssm.2018.116043    534 Downloads   835 Views  
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ABSTRACT

This paper draws up on the companies that completed IPO in GEM to investigate the influence of R & D and technology on IPO underpricing, and venture capital (VC)’s moderator effect on this influence. We find that information asymmetry causes high-R & D and high-tech IPOs to become underpriced. VC can play the certification role to mitigate the positive correlation between technology and IPO underpricing, while VC cannot serve as a supervisor and therefore strengthen the positive correlation between R & D and IPO underpricing. More importantly, IPO underpricing 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. Our result is more significant for the companies with VC background.

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Wang, A. (2018) Technology, R & D and IPO Underpricing: The Moderator Effect of Venture Capital. Journal of Service Science and Management, 11, 631-649. doi: 10.4236/jssm.2018.116043.

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