The effects of R&D, venture capital, and technology on the underpricing of IPOs in Taiwan
AbstractInformation 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. Copyright Springer Science+Business Media, LLC 2012
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Bibliographic InfoArticle provided by Springer in its journal Review of Quantitative Finance and Accounting.
Volume (Year): 39 (2012)
Issue (Month): 4 (November)
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Web page: http://springerlink.metapress.com/link.asp?id=102990
High-tech firms; Initial public offerings; R&D expenditure; Technology; Venture capital; G24;
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- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
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