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https://ssrn.com/abstract=474542
 
 

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Venture Capital and Corporate Governance in the Newly Public Firm


Yael V. Hochberg


National Bureau of Economic Research (NBER); Rice University - Jesse H. Jones Graduate School of Business

September 6, 2011

Review of Finance, Forthcoming

Abstract:     
I examine the effects of venture capital backing on the corporate governance of the entrepreneurial firm at the time of transition from private to public ownership. Using a selection model framework that instruments for venture backing with variations in the supply of venture capital, I conduct three sets of tests comparing corporate governance in venture- and non-venture-backed IPO firms. Venture-backed firms have lower levels of earnings management, more positive reactions to the adoption of shareholder rights agreements, and more independent board structures than similar non-venture-backed firms, consistent with better governance. These effects are not common to all pre-IPO large shareholders.

Number of Pages in PDF File: 51

Keywords: Venture capital, corporate governance, initial public offering, earnings management, boards of directors

JEL Classification: G24, G34


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Date posted: December 11, 2003 ; Last revised: February 6, 2016

Suggested Citation

Hochberg, Yael V., Venture Capital and Corporate Governance in the Newly Public Firm (September 6, 2011). Review of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=474542 or http://dx.doi.org/10.2139/ssrn.474542

Contact Information

Yael V. Hochberg (Contact Author)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Rice University - Jesse H. Jones Graduate School of Business ( email )
6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
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