Persistence of Innovation Around Initial Public Offerings: Evidence from NonVC-Backed IPOs

58 Pages Posted: 28 Jan 2015 Last revised: 17 Jul 2018

See all articles by Serdar Aldatmaz

Serdar Aldatmaz

George Mason University - Department of Finance

Ugur Celikyurt

Koc University - College of Administrative Sciences and Economics

Date Written: June 27, 2018

Abstract

We study the innovation activity of firms going public and find that post-IPO innovation activity is highly associated with pre-IPO innovation activity at both venture-capital- and non-venture-capital-backed firms. This persistence in innovation suggests that firms’ pre-IPO innovation experience might influence the effect of venture-capital-backing on post-IPO innovation. Indeed, we find that venture-capital-backing helps companies with low pre-IPO innovation activity to produce more innovation output post-IPO, while it is negatively associated with post-IPO innovation at companies with some pre-IPO innovation experience, which we try to explain with an IPO timing argument. We attempt to address potential endogeneity issues in a matching framework.

Keywords: Venture Capital, Initial Public Offerings, Innovation, Patents, Persistence

JEL Classification: G24, G30

Suggested Citation

Aldatmaz, Serdar and Celikyurt, Ugur, Persistence of Innovation Around Initial Public Offerings: Evidence from NonVC-Backed IPOs (June 27, 2018). Available at SSRN: https://ssrn.com/abstract=2553908 or http://dx.doi.org/10.2139/ssrn.2553908

Serdar Aldatmaz (Contact Author)

George Mason University - Department of Finance ( email )

Fairfax, VA 22030
United States

Ugur Celikyurt

Koc University - College of Administrative Sciences and Economics ( email )

Rumelifeneri Yolu
Sariyer 80910, Istanbul
Turkey

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