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From “super app” to “super VC”: the value-added effect of China's digital platforms

Wang, Jiancheng and Li, Xiaoye (2023) From “super app” to “super VC”: the value-added effect of China's digital platforms. Finance Research Letters, 54. ISSN 1544-6123

[img] Text (Accepted Manuscript-Xiaoye Li-Finance Research Letters) - Accepted Version
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Identification Number: 10.1016/j.frl.2023.103773

Abstract

This paper studies China's big digital platforms’ value-added effect as venture capitalists, using a dataset of companies registered in China that eventually reach the initial public offering stage. We find that China's digital platforms’ investments positively affect their portfolio firms’ IPO performance, in terms of higher IPO valuation, lower underpricing, and shorter time to reach the IPO stage, which is inconsistent with the grandstanding hypothesis. The plausible underlying channels are the certification and monitoring roles played by China's digital platform. The results remain robust after addressing several concerns. Our study sheds new light on VCs’ characteristics and digital platforms’ activities.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/finance-rese...
Additional Information: © 2023 Elsevier Inc
Divisions: Management
Subjects: H Social Sciences > HG Finance
JEL classification: G - Financial Economics > G2 - Financial Institutions and Services > G23 - Pension Funds; Other Private Financial Institutions
G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking; Venture Capital; Brokerage; Rating Agencies
G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General
Date Deposited: 18 Apr 2023 15:06
Last Modified: 09 Jun 2024 19:42
URI: http://eprints.lse.ac.uk/id/eprint/118665

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