The Role of Venture Capital in the Underpricing of European Life Science Companies

Journal of Economics and Management, 18

1 Pages Posted: 15 Jan 2015

See all articles by Alessandra Tanda

Alessandra Tanda

University of Pavia

Luisa Anderloni

University of Milan - DEAS

Date Written: October 10, 2014

Abstract

This study evaluates the underpricing of the European companies operating in the life science industries at IPO. Results show a positive and high underpricing for the IPOs occurred between 2002 and 2007. Moreover, when differentiating between VC backed and non VC backed firms, we find that the first exhibit a lower underpricing both for the first day of trading and the first week after the IPO, and evidence support the idea of a positive contribution of venture capitalists to the performance of the listing firms. Moreover, VC backed firms appear less risky, registering a lower volatility of returns in the days following the IPO date.

Keywords: venture capital, IPO, VC backed, life science companies, Europe

Suggested Citation

Tanda, Alessandra and Anderloni, Luisa, The Role of Venture Capital in the Underpricing of European Life Science Companies (October 10, 2014). Journal of Economics and Management, 18, Available at SSRN: https://ssrn.com/abstract=2547573

Alessandra Tanda (Contact Author)

University of Pavia ( email )

Strada Nuova, 65
Pavia, 27100
Italy

Luisa Anderloni

University of Milan - DEAS ( email )

Via Conservatorio, 7
Milan, 20122
Italy
+390250321546 (Phone)
+390250321505 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
32
Abstract Views
582
PlumX Metrics