Governmental Venture Capitalists and IPO Premium of New Ventures——From an Institutional Logics Perspective

Abstract

Abstract: The effect of governmental venture capitalist (GVC) investment in new ventures has attracted the attention of many scholars. However, most of the existing studies mainly focus on the role of GVC in promoting technological innovation of new ventures, or only analyze its impact on corporate governance, and seldom focus on the IPO performance, which lacks a more systematic theoretical perspective. From the perspective of institutional logics, this paper explores the impact of GVC investment on the IPO premium of new ventures in Chinese context. Different from PVC’s “professional service logic”, GVC is driven by “national logic”, emphasizing the public goods attributes of investment and its promotion of technological innovation or industry, rather than getting financial return, so it will have a negative impact on the IPO premium. Based on the data of 494 firms, this study shows that GVC has a negative effect on the IPO premium of startups. Furthermore, this negative effect of GVC on the IPO premium will be strengthened as the entry time of institutions increases, and it will be weakened as the number of joint investments increases. The paper not only deepens the theoretical explanation of GVC’s role in the growth of new ventures, but also provides a reference for the practice of GVC’s participation in corporate investment.

Key words: governmental venture capitalist, IPO premium, institutional logics, syndication

Hao Bin, Liu Xiaoyu, Zhang Shiyun. Governmental Venture Capitalists and IPO Premium of New Ventures——From an Institutional Logics Perspective[J]. Management Review, 2023, 35(10): 94-104.

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