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Foreign business activities, foreignness of the VC syndicate, and IPO value

Chahine, Salim, Saade, Samer and Goergen, Marc 2019. Foreign business activities, foreignness of the VC syndicate, and IPO value. Entrepreneurship Theory and Practice 43 (5) , pp. 947-973. 10.1177/1042258718757503

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This article examines the role played by foreign venture capital (VC) firms in U.S. initial public offerings (IPOs). We find that U.S. VC–backed IPOs benefit from the foreignness of the VC syndicate. Specifically, jointly with domestic VC firms, foreign VC firms certify the quality of their portfolio companies at the time of the IPO, which increases their IPO premium. Foreign VC firms also play an advisory role, enhancing the foreign business activities of their U.S. investees, thereby increasing the IPO premium. Finally, value added by foreign VC firms is greater through their monitoring role if they originate from countries where the investee has foreign business activities.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: SAGE
ISSN: 1042-2587
Date of First Compliant Deposit: 2 March 2018
Date of Acceptance: 20 December 2017
Last Modified: 07 Jul 2020 17:15

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