We examine the real effects of financial markets from the perspective of venture capital (VC) investors. We postulate that VCs actively learn information contained in public markets when designing investment structure in their startup ventures. We find that, when public market prices are more informative, VCs are less likely to stage finance startup ventures and to syndicate with other VCs to save the costs associated with staging and syndication. This effect is more pronounced
when VCs are lack of industry-specific expertise, VCs are physically distant from their ventures so that collecting soft information is costly, and their investments are less risky. Using exogenous events that unexpectedly alter financial analysts' and short sellers' ability to produce information, which makes public market prices less informative, we show that our results are unlikely driven by endogeneity. Our paper sheds new light on the real effects of financial markets by showing that
private equity investors actively learn information from public equity markets.
Key words: Learning; Venture capital; Staging; Syndication; Price informativeness
JEL number: G24; G18; G14
학회소식
[2016년 제 4차] Is the Stock Market Just a Side Show? Evidence from
작성자 : 관리자
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게시일 :
2016-12-21
