Venture Capital and Corporate Governance in the Newly Public Firm,” Working paper (2002)
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BibTeX
@MISC{Hochberg02venturecapital,
author = {Yael V. Hochberg and Steve Drucker and Darrell Duffie and Steve Grenadier and Thomas Hellmann and Harrison Hong and Ron Kasznik and Michael Klausner and Ilan Kremer and Laura Lindsey and Ulrike Malmendier and Paul Pfleiderer and Morten Sorensen and Jeff Zwiebel},
title = {Venture Capital and Corporate Governance in the Newly Public Firm,” Working paper},
year = {2002}
}
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Abstract
This paper examines the effects of venture capital backing on the corporate governance of the firm following the IPO. I conduct three independent sets of tests examining effectively how governance and monitoring might differ for venture- and non-venture-backed firms. First, I find that venture-backed firms have lower earnings management, as measured by the level of their discretionary accounting accruals, than similar nonventure-backed firms. Second, venture-backed firms experience a significantly higher wealth effect upon the announcement of the adoption of a shareholder rights agreement (poison pill) than non-venture-backed
