Investment funds and underpricing of shares

Hitalo Alberto de Souza Faria Castilho
Universidade Presbiteriana Mackenzie, Brasil
Matheus Souza De Resende
Universidade Presbiteriana Mackenzie, Brasil
Eduardo Ramos de Oliveira Franco Montoro
Universidade Presbiteriana Mackenzie, Brasil
Vinicius Akio De Almeida Shotoko
Universidade Presbiteriana Mackenzie, Brasil
Michele Nascimento Jucá
Universidade Presbiteriana Mackenzie, Brasil
Eli Hadad Junior
Universidade Presbiteriana Mackenzie, Brasil

Investment funds and underpricing of shares

Revista de Gestão, vol. 26, no. 4, 2019

Universidade de São Paulo

Abstract: Abstract

Purpose

The purpose of this paper is to assess whether greater participation of venture capital/private equity (VC/PE) funds in the companies’ capital structure at the moment of initial public offering (IPO) contributes to the reduction in the underpricing of their shares.

Design/methodology/approach

Descriptive statistics, correlation analysis, mean difference test and cross-sectional regression were used. The final sample consisted of 89 companies making IPO in Brasil Bolsa Balcão between 2007 and 2017.

Findings

The participation of VC/PE funds was shown to mitigate the effect of information asymmetry on managers and shareholders, thus reducing the underpricing of companies at the moment of IPO (H1). However, the expectation that a greater participation of these funds promotes further reduction in a potential underpricing (H2) was not confirmed.

Research limitations/implications

One can highlight the small amount of IPOs during the sampling period due to the occurrence of international and national economic crises, as well as the difficulty in obtaining information on the participation of VC/PE funds in the companies’ capital structure.

Practical implications

It was observed that information asymmetry had a mitigating effect from the presence of these funds in the companies, which can improve the pricing of their shares, decrease the costs and make volume captions viable for investments, in addition to giving credibility to the market information effectiveness.

Originality/value

This study differs from others in that it assesses not only the influence of VC/PE funds on the reduction of the underpricing of IPO shares, but also the participation of these funds in the capital of these companies.

Keywords: · Underpricing · Initial public offering · Brasil Bolsa Balção · Cross-sectional regression · Mean differences · Venture capital and private equity funds.

1. Introduction

Between 2007 and 2017, the Brazilian economy underwent periods of oscillation with increase and decrease in the gross national product, thus directly affecting the basic interest rates (SELIC rate) and hampering the access to credit (Bacen, 2018a, b). In periods of crisis, one can highlight the role played by funds of venture capital (VC) and private equity (PE). These funds work as a financial alternative for ventures with high potential of growth and risk. In fact, investments made by these funds were R$13.3bn in 2014, R$18.5bn in 2015 and R\$11.3bn in 2016 (ABVCAP, 2018).

Initial public offering (IPO) is among the most common forms of VC/PE investment funds and whose life cycle lasts, on average, from two to seven years. According to Cumming and Johan (2008), the presence of VC/PE investment funds in companies contributes to reducing the information asymmetry in the market. In order to do so, fund managers submit the prospective companies to due diligence processes and other analyses for assessment of risks and opportunities. Therefore, companies receiving such investments are viewed as more reliable by non-fund investors, thus creating a quality stamp to their IPO.

According to Miller and Reilly (1987), underpricing is a way for market operators to compensate for the lack of information at the moment of IPO. Also, Sonoda (2008) materialises this concept by stating that underpricing is an under-estimation of or discount in share prices in relation to the actual market price. As for IPO, specifically, this occurs when its offering price is lower than that on the first day of negotiation. Therefore, underpricing can be understood as the difference between closing price and offering price of IPO share on the first day of negotiation. For Ribeiro (2005), Gioielli (2013) and Sonoda (2008), the presence of VC/PE funds decreases the information asymmetry between owners and investors so that the effect of underpricing on IPOs can be mitigated in companies relying on the participation of these funds.

According to Belghitar and Dixon (2012), companies with prior participation of VC/PE funds are considered to be of low risk. Therefore, emitters do not need to under-price their IPO shares in order to attract investors. It is also thought that VC/PE funds regularly include IPO companies in their portfolios so that they have a strong incentive to establish a reliable reputation. This enables them to access the IPO market in the future under favourable conditions. Finally, the reputation of credibility helps these funds to establish a strong relationship with all offering participants, namely, auditors, insurers, pension fund managers and institutional investors.

In view of the above, the objective of this study is to assess whether the presence of VC/P funds in invested companies contributes to reducing the underpricing of their shares at the moment of IPO. The resulting hypotheses are:

H1.

Companies with prior participation of VC/PE funds have less underpricing of IPO shares compared to those without such participation.

H2.

The greater the prior participation of VC/PE funds in these companies’ capital, the less the underpricing of IPO shares.

Therefore, the population of companies making IPO in the Brasil Bolsa Balcão (B3) between 2007 and 2017 were considered. The hypotheses were verified by using descriptive statistics, correlation analysis, mean difference tests and cross-sectional regression, including their assumptions. Differently from other studies, this one is concerned with capturing the sensibility regarding the participation of VC/PE funds in the companies’ capital structure before their IPO. Either high or low level of property has different impacts on the underpricing of these companies. From the market’s perspective, this fact suggests that the simple presence of these funds cannot have the expected effect on the mitigation of a potential asymmetry between managers and owners, in addition to other conflicts regarding the market information effectiveness. Also, the recent crisis in the country’s economy might shed light on the relevance of these funds as alternative development sources in the Brazilian market.

2. Literature review

Underpricing can be identified by means of abnormal positive returns from shares in the initial negotiations. This fact means that the company is evaluated for a value lower than the potential one, thus enabling profitability for investors in the first days of negotiation. Therefore, underpricing is regarded as an indirect cost for the company because part of the offer is not collected. This phenomenon is termed in the finance literature as “leaving cash on the table” and can be measured by the number of shares multiplied by the difference between closing price in the first day of negotiation and the initially offered one (Ibbotson, 1975; Miller & Reilly, 1987; Tiniç, 1988; Leal & Lemgruber, 2000; Loughran & Ritter, 2002).

There is still no definitive explanation on underpricing. A view on this theme supports that underpricing occurs due to market imperfections regarding the IPO process, that is, the existence of information asymmetry among investors. For Benveniste and Spindt (1989) and Spatt and Srivastava (1991), the book building acts as a mechanism for data extraction so that adverse selection among investors can be reduced. These data are useful in the pricing of shares and set accuracy to the value being determined. The book-building practice enables the underwriters to obtain more information from better-informed investors (Cornelli & Goldreich, 2003). For Drake and Vetsuypens (1993), on the other hand, underpricing occurs due to legal liability. Underwriters use the book-building process in order to avoid legal problems in case of lack of clarification on something relevant in the IPO prospects. According to Taranto (2002), in turn, underpricing occurs due to the fact that executives who possess stock options can have fiscal benefit with the reduction of share prices in the first day of negotiation.

With regard to the concept of VC/PE funds, Takahashi (2006) states that VC funds are those invested in companies operating in new markets (NM), preferably the ones with a bold and entrepreneurial stance. In addition, VC funds enable companies to position themselves in a competitive market environment despite their difficulties to obtain credit lines due to their low level of net equity (Engel, 2002; Leite & Souza, 2001). On the other hand, investments of PE funds are aimed at large-sized companies with high growth potential. This investment is directly negotiated between funds and managers by means of a private placement. The financing of companies by means of VC/PE funds is aimed at providing capital for them and aggregating value through administrative participation (Barry, 1994; Takahashi, 2006; Sonoda, 2008).

In Brazil, VC funds are regulated under the normative instruction number 209/94 (CVM, 1994), whereas PE funds are regulated under the normative instruction number 391/03 (CVM, 2003). According to Carvalho, Furtado and Ribeiro (2006), the participation of VC/PE funds in the Brazilian market began in the 1990s due to the country’s economic stability resulting from the Real Plan. The second cycle of this industry occurred in the 2000s when 71 VC/PE funds invested in 306 companies. Today, there are 157 VC/PE funds in Brazil (ABVCAP, 2018).

VC/PE funds have the reputation of being involved in the control of the company’s activities. Wruck (2008) states that these funds add new management methodologies to the market, which, in turn, are applied to the invested companies. The VC/VE funds make investments in target companies, that is, those with management problems or inefficiency. According to Williamson (1967) and Jensen (1986), these funds understand that excess of free cash flow and high capitalisation are signs of poor management by the company.

The market’s positive perception of the presence of VC/PE funds in companies is related to the theory of agency. According to Jensen and Meckling (1976), financing decisions are affected by the fact that the companies’ owners delegate the management to fund agents. In this way, it is not possible to ensure that the fund agent will always make a great financial decision under the company managers’ point of view. Mechanisms of control, corporate management, variable remuneration for managers, indebtedness, among others, are established in order to conciliate the interests of managers with those of shareholders. This set of measures is termed agency costs. The theory of agency points to the existence of information asymmetry between managers and owners.

Barry, Muscarella and Peavy (1990) found that companies with VC/PE fund investment are better positioned in the financing market before IPO compared to those with no participation of these funds in their capital structure. It is believed that companies belonging to the portfolio of these funds provide superior quality in the moment of IPO as a result of the reduced agency conflicts. For Saito and Silveira (2008), this occurs because of the concentration of functions as the same person plays the roles of manager and owner, which condenses the efforts for maximisation of the shareholders’ wealth.

Another positive aspect highlighted in the literature regarding the presence of VC/PE funds in the company’s capital structure is the mitigation of information asymmetry. This occurs when two or more fund agents make an economic transaction in which one of the parts involved holds more information than the others. Information asymmetry is one of the main market failures occurring when it is difficult or very expensive to obtain relevant and precise data on the quality of traded goods. This fact alters the market balance and resource allocation (Akerlof, 1970; Lambert, Leuz, & Verrecchia, 2011).

Rock (1986) identified that non-informed investors are more inclined to invest in IPO shares with underpricing as they can wait longer until the shares become well valued. In turn, Megginson and Weiss (1991) pointed to the decrease in the information asymmetry when companies have participation of VC/PE funds in their capital structure. Therefore, one expects that these companies’ IPO shares suffer less underpricing than those without participation of these funds.

Another aspect affecting the underpricing of shares is their negotiation in the differentiated segment of the NM of B3 (2017). Companies issuing shares in this segment are subject to more rigid rules of corporate management and transparency, thus reducing the information asymmetry between the parts. Fernandes (2007) associated the performance of companies in this segment to the reduction of underpricing, since the market provides reliability and protection to the company’s minority shareholders. In addition, companies with better earnings margin before interest and taxes (EBIT) are more likely to better perform during the IPO period, which reduces potential noises on the entity and mitigates information asymmetry-related problems (Fernandes, 2007).

The issue of information asymmetry still points to the occurrence of two types of problems, namely, adverse selection and moral hazard (Akerlof, 1970; Spence, 1973; Stiglitz, 1985). According to Lima, Rodrigues, Silva, and Silva (2012), adverse selection occurs because the manager has information unknown by the investors, whereas moral hazard refers to the likelihood of an economic agent changing his or her behaviour depending on the context in which the economic transaction occurs. In turn, Galozzi (2014) states that managers have information on the company which is unknown to the market. Therefore, in the IPO period, shares are negotiated with higher price because of the optimism on partial information. This may lead to underpricing, but the presence of VC/PE funds can mitigate these types of problems in order to decrease the information asymmetry and consequently both adverse selection and moral hazard.

As for the signalling impact of VC/PE funds on the market, it should be clarified that the theory of signalling evidences the existence of indicators, which enable to decrease the problem of information asymmetry (Spence, 1973). Megginson and Weiss (1991) pointed out that the presence of VC/PE funds provides signals to the market about the quality of the company, thus reducing information asymmetry and allowing investors to attest the quality of a possible IPO. According to the authors, this occurs due to factors such as: commitment of the VC/PE funds to the invested companies; relationship of fund agents with auditors, underwriters and investment managers; and reputation of the VC/PE funds.

Minardi, Ferrari, and Tavares (2013) stated that the presence of VC/PE funds can provide signals of good future performance as these fund models have a short lifetime and need resources to keep their business. In this way, they need to identify promising companies and good managers in order to develop and expand their business. Moreover, it is important to ensure that these companies have a good performance over time as they are always making IPOs and ensuring the quality of the next ones.

For Galozzi (2014), there are both well- and ill-informed investors about the company. In order to attract those with low-quality information and ensure successful IPOs, the shares are offered at prices systematically lower than the expected value. This fact implies greater underpricing or high cost of placement. As a way of mitigating this undesired effect, the founder should have a high level of property in the company following the offer in order to signal to the market that he or she believes in the company’s success in the future. Another way of avoiding such high costs is to have VC/PE funds in the company’s capital structure, thus mitigating noises and ensuring the veracity of the share values.

Finally, another aspect influencing the IPO decision is the market moment. In a study conducted by Baker and Wurgler (2002), they found that companies tend to issue shares during windows of opportunity in which the own capital cost is relatively lower than that of other sources of capital. Therefore, North-American companies tend to issue more shares than debt securities when the stock market value is higher than its patrimonial value. This moment is defined as market timing.

Lucas and McDonald (1990) showed that companies opt to make IPOs at periods of heated market, which adds value to negotiated shares. The prediction of the market timing is associated with the ability to analyse the share price movement in the market based on the macro-economic view of exchange and taxation policies (Fama, 1970). For Baker and Wurgler (2002), the theory of market timing shows that the company’s capital structure is the result of past attempts by managers to take advantage of favourable conditions of the stock market, in which new shares are issued when they are perceived as over-valued by the market and re-purchased when perceived as under-valued. The performance of IPO shares is related to the current market moment. A lower underpricing is expected in periods of high appreciation (Oliveira & Kayo, 2015).

This can be evidenced by the existing negative relationship between market-to-book value rate and leverage of the company. As the market value of the company surpasses its book value, new shares are issued to the detriment of debts. The opposite occurs when the market value is lower than the book value. Underpricing of shares in the IPO period is equally affected by the ideal market moment. When there is a large (or small) number of IPOs, this period is termed as hot (or cold) market. The hot market usually occurs when companies are well evaluated, resulting in a high number of IPOs. According to Rossi and Marotta (2010), 83 per cent of the Brazilian companies made IPOs in hot market periods and 17 per cent of them opened their capital in cold market periods between 2004 and 2007. The total volume of resources obtained in hot market periods was higher by 17 per cent than that in the cold market periods. Ritter (1984) adds by stating that there is a higher incidence of underpricing in the periods of hot market.

Table I shows a synthesis of these studies in which underpricing is the dependent variable. The expected signals of independent and control variables are supported by the above-cited theories. In sum, one can observe that there are divergent results on the prior participation of VC/PE funds in the reduction of underpricing of shares following the IPO period (H1). Foreign studies showed a great number of significantly negative results, as expected, whereas national studies reported no statistically significant results. With regard to control variables, Megginson and Weiss (1991) found more consistent results for market share, IPO lead co-ordinator and company age before IPO. Most of the other studies had no statistical significance and this fact corroborates the need for new studies on the theme.

3. Methodology

The population of interest consists of all companies opening their capital (IPO) in B3 between January 2007 and December 2017. The final sample comprised 89 companies, with 58 having participation of VC/PE funds in their capital structure before IPO and 31 having no type of investment. Evolution of these companies is presented in Table II. Capital IQ is the main database, being produced by the Standard & Poor’s. However, Economatica and Comdinheiro databases were also used for complementing the missing data.

Data were assessed by using descriptive statistics, correlation analysis, cross-sectional regression and mean difference test. The variables assessed and their descriptions are presented, respectively, in the regression model of the first equation and Table III. Initially, the descriptive statistics of the data are presented in order to understand populations and samples. According to Fávero, Belfiore, Silva and Chan (2009), descriptive statistical measures are aimed at studying central position measurements (i.e. mean, median, mode and dispersion), standard deviation, variance, amplitude, asymmetry and kurtosis.

Next, one has verified signal, value and statistical significance of the correlation. Correlation analysis consists in assessing two variables and how they related to each other in order to quantify the power and direction of the existing relationship between them (Dinardo & Johnston, 2001; Fávero et al., 2009). In the present study, correlation analysis had two objectives: to verify the existence of a potentially high correlation between dependent and independent/control variables and to identify a potentially high multicollinearity between independent/control variables. If it exists, then the regression model should confirm it.

Next, the regression model (see the first equation) is applied to test the hypothetical assumptions with normality and homoscedasticity of residuals, linearity of parameters and absence of high multicollinearity between explicative variables (Corrar, Paulo, & Dias Filho, 2006; Sweeney, Williams and Anderson, 2013). The application of the cross-sectional regression was aimed at verifying H1: companies with prior participation of VC/PE funds have less under-priced shares during the IPO period compared to those without such participations. As a robustness test, a non-parametric mean difference test using independent samples was performed:

UNDi=β0+β1PFUNi+β2VOLi+β3MKCi+β4IDAi+β5RMi+β6MEi+β7DNMi+ui,

where β0 is the linear coefficient; β1–7 the angle coefficients; i the companies; u the error term.

Finally, the H2, in which the higher the participation of VC/PE funds in these companies the less the underpricing of their shares during the IPO period, was tested by using the Wilcoxon’s sign test for companies with participation of VC/PE funds in their capital structure before IPO. In this test, the numerical values of the difference between each pair were calculated, resulting in three possible conditions: increase (+), decrease (−) or equality (=). Once all differences between the values obtained for each pair of data have been calculated, the differences were ordered by their absolute value (i.e. without sign) so that the original values could be replaced by their respective position in the ordered scale. The test of the hypothesis of equality between the groups is based on the sum of positions of negative and positive differences. The null hypothesis states that mean values are equal, whereas the alternative hypothesis states that the mean values are not equal (Wilcoxon, 1945; Siegel & Castellan, 2006).

Of the companies with participation of VC/PE funds in their capital structure before IPO, one can identify those with positive underpricing. Next, these companies were distributed in quartiles in which the first (Q1) and fourth (Q4) quartiles were those with less and greater participation of VC/PE funds, respectively. After this classification, the mean difference test is applied to underpricing of the companies (Q4–Q1).

4. Analysis of the results

Tables AI and AII present the main characteristics of the companies making IPOs, which were grouped depending on having or not having VC/PE funds, respectively. In turn, Table IV briefly lists other overall characteristics of the IPOs in our sample. One can observe that lead co-ordinating banks UBS Pactual, Itaú BBA and Credit Suisse are those extensively operating in the IPO market. However, by analysing the quality of these positions and considering IPOs with participation of VC/PE funds, it is noted that Merrill Lynch is the most highlighted. Another interesting aspect is the concentration of positions in the years of 2007 and 2011, which were the periods preceding the systemic crises initiated in the USA and Europe by contagion effect. From 2014 on, there was a low incidence of IPOs in Brazil as a result of economic problems, which recovered in 2017. One can also highlight that the majority of IPOs occur in the differentiated segment of corporate management of the NM. At last, about 60 per cent of the IPOs occur in companies older 20 years – a fact explaining one of the reasons for the reduction of information asymmetry.

With regard to the descriptive statistics of the variables composing the Equation (1), one can see in Table V that the mean underpricing is 2.3 per cent in the period, with minimum and maximum values of −37 and 43 per cent, respectively. The participation of VC/PE funds has a mean value of 7.1 per cent in the total sample. Minimum value of 0 represents the 31 companies without participation of these investment funds before IPO. In addition, lead co-ordinators represent a mean value of 18.2 per cent of the total number of offers in the market. At last, it is worth highlighting that the mean EBIT margin was 22 per cent in the year before IPO of the companies.

Table VI shows the correlation analysis of the variables in the econometric model in Equation (1). One can see that the greater the participation of VC/PE funds in the companies’ capital structure, the less their underpricing in the IPO period. This result is in accordance with H1. In addition, contrary to the expected, there is a significantly positive relationship between volume of IPO shares and underpricing. At last, no significantly high positive correlation was identified between explicative variables, which should point to a lack of high multicollinearity in the tests of assumptions in the cross-sectional regression model.

For analysis of the results in the cross-sectional regression model, it is necessary, before all, to test their assumptions. Although normality of the residuals was not identified, the Gauss–Markov theorem showed that estimators of ordinary least squares are still the best linear unbiased estimators as they have minimum variance (Gujarati, 2006). Moreover, the value of the variance inflation factor is 1.06, being lower than 10. This fact indicates lack of high multicollinearity between explicative variables. Furthermore, the Breusch–Pagan test indicates the presence of heteroscedasticity of the residuals, which was corrected by means of robust standard errors. The linearity of coefficients was verified by considering a significant econometric model as a whole, with F-test having a value of 2.26 per cent.

Table VII shows that there is a significantly negative relationship between prior participation of VC/PE funds in the capital structure and underpricing of companies in the IPO period. This fact confirms the theories of agency and information asymmetry. According to them, the presence of VC/PE funds in the company’s capital structure reduces the information asymmetry, thus mitigating potential conflicts between managers and shareholders. This occurs when the roles of manager and owner are played by the same person, which, in turn, condensates his or her efforts to maximise the shareholders’ wealth. It is worth highlighting that for each 1 per cent increase in the participation of VC/PE funds in the capital structure, there is a reduction of 0.10 per cent in the underpricing of the companies. Furthermore, this result is in accordance with Megginson and Weiss (1991), Bruton, Chahine and Filatotchev (2009) and Mogilevsky and Murgulov (2012). Therefore, H1 was observed.

With regard to the control variables, the significantly positive relationships between volume of IPO shares and IPO lead co-ordinator are contrary to those expected by the theories of market timing and signalling, respectively. These same results were also reported by Sonoda (2008) and Altynnikova and Sarampasina (2017). The other control variables had not statistical significance. In addition to the regression model test, a non-parametric mean difference test using independent samples was performed, indicating robustness. As a result, one can observe that the underpricing of companies without prior participation of VC/PE funds was statistically higher (p=0.2823) than that of invested companies before IPO, thus confirming H1.

Finally, Table VIII shows analysis of H2, which was performed by using the Wilcoxon’s sign test. Of the 58 companies having participation of VC/PE funds in their capital structure, 32 have negative or zero underpricing and 26 have positive underpricing prior IPO participation. These 26 companies with positive underpricing were classified into four quartiles (Q), in which Q1 contained companies with less participation of funds and Q2 contained those with greater participation. It was expected that the difference between Q4 and Q1 resulted in a statistically negative value different from zero. Companies in Q4 had less underpricing compared to those in Q1. However, the null hypothesis was accepted as the mean values were statistically equal, meaning that H2 could not be confirmed.

5. Conclusion

In Brazil, the participation of VC/PE funds is increasingly more relevant as an option of financing for companies, mainly in view of the current economic recession scenario. IPO is among the most common ways of VC/PE fund investments. In this process, one can sometimes observe the occurrence of underpricing, that is, an under-evaluation of the prices of shares in relation to their real market price. Nevertheless, the presence of VC/PE funds invested in companies contributes to reducing the information asymmetry in the market by fund managers.

Therefore, the present study is aimed at assessing whether the presence of VC/PE funds in invested companies contributes to reducing the underpricing their shares in the IPO period. The resulting hypotheses were the following: H1 – companies with prior participation of VC/PE funds have less underpricing of IPO shares compared to those without such participation, and H2 – the greater the prior participation of VC/PE funds in these companies’ capital, the less the underpricing of IPO shares. In order to examine its pertinence to the Brazilian market, a final sample of 89 companies making IPO in B3 between 2007 and 2017 was considered. The tests applied were the mean difference test between companies with prior participation of VC/PE funds and those without such participation, descriptive statistics, correlation analysis and cross-sectional regression with validation of hypotheses.

As a result, H1 was confirmed. The statistically significant negative relationship of prior participation of VC/PE funds in the companies indicates to the market that these funds have an effective involvement with the corporate management. This fact can mitigate agency-related problems, thus reducing information asymmetry and consequently the under-evaluation of the company based on a value lower than the potential one in the IPO period. This result is supported by Megginson and Weiss (1991), Bruton et al. (2009) and Mogilevsky and Murgulov (2012), being characterised as an evolution in relation to the Brazilian studies conducted by Fernandes (2007) and Sonoda (2008).

With regard to H2, it was observed that it was not confirmed. Nevertheless, it should be highlighted that among the companies with participation of VC/PE fund, only 26 (45 per cent) had positive underpricing, which limits the sample size and may have influenced our results. In this way, this is the first original contribution of the present study showing that either a high or a low level of property has different impacts on the underpricing of these companies.

With regard to theoretical aspects, the present study contributes to the empirical analysis of the participation of VC/PE funds in the companies’ capital structure before the IPO period, thus being an instrument to mitigate the information asymmetry between managers and shareholders as well as to indicate the quality of these companies and re-affirm the reputation of these funds. As for the economic and commercial impacts, one can observe that this mitigating effect allows to better price the shares, which reduces costs and makes volume captions viable for investments, in addition to giving credibility to the market information effectiveness.

However, the present study has a limitation in that a small amount of IPOs was used during the sampling period because of national and international economic crises. In addition, one can highlight the difficulties in obtaining information on the participation of VC/PE funds in the companies’ capital structure, among other reasons, due to business combinations. At last, it is suggested that the relationship with other characteristics of VC/PE funds affecting the underpricing of the companies should be analysed, such as date of establishment, nationality and number of invested companies before IPO.

Table I
Synthesis of the results of empirical studies
 Presence of VC/PE funds before IPO I TA & IA − − 1 − 1 − 1 + 1 − ns + ns Logarithm of IPO volume captured C MT − + ns − ns + 1 + 1 + 10 Market share of the IPO lead co-ordinator C TS − − 1 − ns + 10 − ns − ns Company’s age before IPO C AS − − 1 − ns − ns − ns + ns + 1 Market return rate in the IPO period C MT + − ns + ns EBIT margin in the year before IPO C IA − − 10 New market dummy for IPO C IA − − 5
Notes: I, independent; C, control; IA, information asymmetry; TA, theory of agency; AS, adverse selection; TS, theory of signalling; MT, market timing

Table II
Sample evolution
 Initial sample 112 (−) Companies with EBIT margin greater than 100% 1 (−) Companies without information on their capital structure before IPO 12 (−) Companies without EBIT margin 10 (=) Final sample 89

Table III
Description of the variables
 UND Underpricing Dependent na UND=(P1−P0)/P0 P1=closing price on the first selling day P0=offer price on the day of IPO PFUN Prior participation of VC/PE funds before IPO Independent − PFUN=NAF/NTA NAF=number of shares belonging to VC/PE funds before IPO NTA=total number of circulating shares after IPO VOL Volume of IPO shares sold Control − VOL=Ln (VV) Ln=Naperian logarithm VV=Volume of IPO shared sold MKC Market share of IPO lead co-ordinator Control − MKC=NOC/NTO NOC=number of share offers managed by the lead co-ordinate NTO=total number of share offers in the market IDA Company’s age before IPO Control − IDA=Ln (AE) Ln=Naperian logarithm AE=Years of the company’s existence before IPO RM Market return rate in the IPO period Control + RM=(IBOV1−IBOV0)/IBOV0 IBOV0=Ibovespa points on the day before IPO IBOV1=Ibovespa points on the day of IPO ME EBIT margin in the year before IPO Control − ME=EBIT/Revenues EBIT before IPO Revenues=net sales income in the year before IPO DNM New market dummy for IPO Control − Dummy for differentiated listing segment of new market in the stock exchange 1=If the company belongs to the new market on the day of IPO 0=If the company does not belong to the new market on the day of IPO

Table IV
General characteristics of IPOs
 General characteristics Total sample With prior participation of VC/PE funds No prior participation of VC/PE funds Lead co-ordinator No. of firms Total (%) Rank No. of firms Total (%) Participation (%) Rank No. of firms Total (%) Rank UBS Pactual 24 27.0 1st 14 24.1 7.404 6th 10 32.3 1st Itaú BBA 21 23.6 2nd 18 31.0 10.444 5th 3 9.7 3rd Credit Suisse 17 19.1 3rd 9 15.5 12.220 3rd 8 25.8 2nd Merrill Lynch 6 6.7 4th 5 8.6 25.909 1st 1 3.2 5th Bradesco BBI 5 5.6 5th 4 6.9 5.621 7th 1 3.2 5th JP Morgan 5 5.6 5th 3 5.2 17.197 2nd 2 6.5 4th Santander 4 4.5 6th 1 1.7 0.010 9th 3 9.7 3rd Unibanco 3 3.4 7th 1 1.7 0.002 11th 2 6.5 4th Citibank 2 2.2 8th 1 1.7 0.012 10th 1 3.2 5th BB Investimento 1 1.1 9th 1 1.7 0.018 8th 0 na na Morgan Stanley 1 1.1 9th 1 1.7 11.568 4th 0 na na Total 89 100 na 58 100 na na 31 100 General characteristics Total sample With prior participation of VC/PE funds No prior participation of VC/PE funds IPO year No. of firms Total (%) Rank No. of firms Total (%) Rank No. of firms. Total (%) Rank 2007 42 47 1st 21 36 1st 21 68 1st 2008 2 2 6th 2 3 6th 0 2009 5 6 5th 3 5 5th 2 6 3rd 2010 7 8 4th 4 7 4th 3 10 2nd 2011 11 12 2nd 9 16 2nd 2 6 3rd 2012 2 2 6th 1 2 7th 1 3 4th 2013 9 10 3rd 8 14 3rd 1 3 4th 2014 1 1 7th 1 2 7th 0 na na 2015 0 na na 0 na na 0 na na 2016 1 1 7th 1 2 7th 0 na na 2017 9 10 3rd 8 14 3rd 1 3 4th Total 89 100 na 58 100 na 31 100 n/a General characteristics Total sample With prior participation of VC/PE funds No prior participation of VC/PE funds Listing segment No. of firms Total (%) Rank IPO year No. of firms Total (%) No. of firms IPO year Rank NM 71 80 1st 50 86 1st 21 68 1st N1 9 10 2nd 5 9 2nd 4 13 3rd N2 9 10 3rd 3 5 3rd 6 19 2nd Total 89 100 58 100 31 100 General characteristics Total sample With prior participation of VC/PE funds No prior participation of VC/PE funds Company’s age before IPO (in years) No. of firms Total (%) No. of firms Total (%) No. of firms Total (%) <5 11 12 8 14 3 10 5–9 12 13 10 17 2 6 10–20 13 15 6 10 7 23 >20 53 60 34 59 19 61 Total 89 100 58 100 31 100

Table V
Descriptive statistics
 UND 89 0.023033 0.109351 −0.37 0.43 PFUN 89 0.071906 0.156612 0 0.94 VOL 89 18.35292 1.141 14.09 21.08 MKC 89 0.182022 0.09966 0.02 0.32 IDA 89 2.98191 1.13815 0 4.72 RM 89 −0.000003 0.013934 −0.047481 0.031618 ME 89 0.222134 0.203148 −0.031 0.78

Table VI
Correlation analysis
 UND 1 PFUN −0.2309 [0.0295] 1 VOL 0.2724 [0.0098] −0.1311 [0.2206] 1 MKC 0.1142 [0.2864] −0.1937 [0.0690] −0.0070 [0.9482] 1 IDA 0.0541 [0.6144] −0.1576 [0.1403] 0.0437 [0.6842] 0.0995 [0.3535] 1 RM 0.0653 [0.5432] −0.0819 [0.4454] 0.0004 [0.9970] −0.0032 [0.9762] 0.0038 [0.9721] 1 ME 0.1238 [0.2479] −0.0958 [0.3720] −0.0079 [0.9412] −0.0859 [0.4234] −0.2271 [0.0323] 0.0306 [0.7757] 1 DNM 0.0346 [0.7473] −0.0258 [0.8107] 0.1505 [0.1593] −0.0462 [0.6674] −0.0604 [0.5736] −0.2194 [0.0389] −0.0348 [0.7459] 1
Notes: Upper values represent the level of correlation, whereas lower values in square brackets represent the significance level of the correlation. At last, the values in italic are statistically significant at the levels of 1 and 5 per cent

Table VII
Cross-sectional regression analysis
 PFUN −0.1097558 0.049038 −2.24 0.028 −0.2073261 −0.0121855 VOL 0.0239245 0.011303 2.12 0.037 0.001435 0.046414 MKC 0.1088828 0.0488404 −2.23 0.029 −0.2060598 −0.0117058 IDA 0.0037503 0.0087164 0.43 0.668 −0.0135925 0.0210932 RM 0.4087845 0.8126132 0.50 0.616 −1.208061 2.02563 ME 0.0682422 0.066457 1.03 0.308 −0.0639865 0.2004708 DNM 0.0041684 0.0276983 0.15 0.881 −0.0509425 0.0592794 Const −0.4565914 0.23257 −1.96 0.053 −0.9193327 0.0061499 Obs 89 R2 0.1366 F(7, 81) 2.50 Prob>F 0.0226
Note: Values in italic are statistically significant at 5 per cent of level

Table VIII
Mean difference test
 0 7 57.5 52.5 1 7 47.5 52.5 Combined 14 105 105 Unadjusted variance 61.25 Adjustment for ties −0.27 Adjusted variance 60.98 H0 und (q4==0)=und(q4==1) z 0.640 Prob>|z| 0.5220

Table AI
Main characteristics of IPOs of companies without prior VC/PE fund investments
 2007 Rodobens NM 91,935,670 31 January 2007 Building construction JP Morgan Camargo Corrêa NM 116,011,470 31 January 2007 Building construction Credit Suisse GVT NM 359,916,150 16 February 2007 Fixed telephony Credit Suisse Anhanguera N2 187,898,540 12 March 2007 Educational services Credit Suisse Heringer NM 59,911,110 12 April 2007 Fertilisers and pesticides UBS Pactual JHSF NM 43,512,160 12 April 2007 Building construction Credit Suisse Metalfrio NM 60,138,700 13 April 2007 Electrical equipment UBS Pactual Bematech NM 151,073,110 19 April 2007 Computers and equipment Itaú BBA AGRA NM 131,162,080 26 April 2007 Building construction Credit Suisse Cremer NM 143,800,150 30 April 2007 Medications and other products Merrill Lynch Sofisa N1 84,027,910 2 May 2007 Banks UBS Pactual Paraná N1 1,313,360 14 June 2007 Banks UBS Pactual Cruzeiro do Sul N1 97,059,840 26 June 2007 Banks UBS Pactual Daycoval N1 173,614,250 29 June 2007 Banks UBS Pactual Indusval N2 39,084,130 12 July 2007 Banks Credit Suisse Redecard NM 670,726,050 13 July 2007 Diverse financial services Unibanco ABC N2 91,562,500 25 July 2007 Banks UBS Pactual Springs NM 47,767,640 27 July 2007 Threads & fabrics Credit Suisse Providência NM 48,725,640 27 July 2007 Diverse materials UBS Pactual General Shopping NM 45,306,270 30 July 2007 Real estate business JP Morgan Sul América N2 53,450,330 5 October 2007 Insurance services Unibanco Subtotal 2,697,997,060 21 2009 Sul América N2 932,766,250 7 October 2009 Banks Santander Cetip NM 261,788,030 28 October 2009 Diverse financial services Itaú BBA Subtotal 1,194,554,280 2 2010 EcoRodovias NM 78,087,380 1 April 2010 Toll road services Itaú BBA Julio Simões NM 25,610,200 22 April 2010 Road transport Bradesco BBI Renova N2 5,357,880 13 July 2010 Electrical energy Santander Subtotal 109,055,460 3 2011 Sonae NM 66,473,440 3 February 2011 Real estate business Credit Suisse Autometal NM 51,233,060 7 February 2011 Road materials Santander Subtotal 117,706,500 2 2012 Unicasa NM 35,366,070 25 April 2012 Real estate business BTG Pactual Subtotal 35,366,070 1 2013 Biosev NM 14,865,490 15 April 2013 Sugar and alcohol BTG Pactual Subtotal 14,865,490 1 2017 Petrobrás NM 766,169,446 15 December 2017 Oil exploration, refinement and distribution Citibank Subtotal 766,169,446 1 Total 4,935,714,306 31

Table AII
Main characteristics of IPOs of companies with prior VC/PE fund investments
 2007 PDG NM 107,740,910 26 January 2007 Building construction UBS Pactual Tecnisa NM 189,215,700 1 February 2007 Building construction Credit Suisse Iguatemi NM 250,514,760 7 February 2007 Real estate business UBS Pactual São Martinho NM 163,826,230 12 February 2007 Diverse foods UBS Pactual JBS NM 244,733,260 29 March 2007 Meat and derivatives JP Morgan Even N1 45,270,100 2 April 2007 Building construction Itaú BBBA Pine N1 96,212,800 2 April 2007 Banks Credit Suisse BR Malls NM 136,210,410 5 April 2007 Real estate business UBS Pactual SLC NM 72,237,400 15 June 2007 Diverse foods Credit Suisse Log-In NM 238,891,170 21 June 2007 Waterway transport UBS Pactual EZTEC NM 120,477,790 22 June 2007 Building construction UBS Pactual Marfrig N1 77,383,410 29 June 2007 Meat and derivatives Merrill Lynch Tegma NM 67,776,300 3 July 2007 Road transport JP Morgan Minerva NM 149,000,600 20 July 2007 Meat and derivatives Credit Suisse TPI NM 157,819,930 23 July 2007 Toll road services Credit Suisse MRV NM 360,083,930 23 July 2007 Building construction UBS Pactual Multiplan NM 97,159,890 27 July 2007 Real estate business UBS Pactual Estácio NM 56,751,600 30 July 2007 Educational services UBS Pactual Tenda N1 124,169,070 15 October 2007 Building construction Itaú BBBA Trisul N1 49,015,550 15 October 2007 Building construction Morgan Stanley Helbor NM 17,408,860 29 October 2007 Building construction Bradesco BBI Subtotal 2,821,899,670 21 2008 Hypermarcas NM 81,819,300 18 April 2008 Diverse products Citibank Le Lis Blanc NM 17,993,250 29 April 2008 Fabrics, clothing and footwear Merrill Lynch Subtotal 99,812,550 2 2009 Visanet NM 670,726,050 29 June 2009 Diverse financial services Unibanco Direcional NM 29,792,720 19 September 2009 Building construction Santander Fleury NM 163,257,660 17 December 2009 Medical and diagnostic services Bradesco BBI Subtotal 863,776,430 3 2010 Aliansce NM 25,689,720 29 January 2010 Real estate business BTG Pactual BR Properties NM 45,561,050 8 March 2010 Real estate business Itaú BBA Mills NM 52,496,220 16 April 2010 Serviços diversos Itaú BBA Raia NM 301,211,320 20 December 2010 Medications Itaú BBA Subtotal 424,958,310 4 2011 Arezzo NM 309,359,700 2 February 2011 Fabrics, clothing and footwear Itaú BBA QGEP NM 146,964,850 9 February 2011 Oil exploration/refinement Itaú BBA International Meal NM 15,631,400 9 March 2011 Restaurant and similar services BTG Pactual Time For Fun NM 62,814,860 13 April 2011 Events and show production Credit Suisse Magazine Luiza NM 143,468,800 2 May 2011 Household appliances Itaú BBA Brazil Pharma NM 72,685,700 27 June 2011 Medications BTG Pactual Qualicorp NM 141,035,710 29 June 2011 Medical and diagnostic services Merrill Lynch Technos NM 47,172,780 1 July 2011 Accessories Itaú BBA Abril N2 34,496,800 26 July 2011 Journals, books and magazines Credit Suisse Subtotal 973,630,600 9 2012 Companhia Locação NM 9,029,300 23 April 2012 Automobile renting Itaú BBA Subtotal 9,029,300 1 2013 Linx NM 251,882,210 6 February 2013 Software and services Credit Suisse Alupar N2 97,371,030 24 April 2013 Electric energy Itaú BBA Smiles NM 332,832,240 29 April 2013 Loyalty programmes Credit Suisse BB Seguridade NM 1,430,522,490 29 April 2013 Insurance services BB Investments CPFL NM 10,776,440 19 July 2013 Electric energy Merrill Lynch Anima NM 81,554,280 28 October 2013 Educational services Itaú BBA SER NM 73,033,520 29 October 2013 Educational services BTG Pactual CVC NM 55,323,170 9 December 2013 Travels and Tourism Itaú BBA Subtotal 2,333,295,380 8 2014 Ouro Fino NM 52,291,129 21 October 2014 Medications and products JP Morgan Subtotal 52,291,129 1 2016 Imagem Diagnósticos NM 122,334,647 28 October 2016 Medical and diagnostic services Itaú BBA Subtotal 122,334,647 1 2017 Movida NM 68,711,487 8 February 2017 Automobile renting Bradesco BBI Hermes Pardini NM 213,521,317 14 February 2017 Medical and diagnostic services Itaú BBA Azul N2 292,446,466 11 April 2017 Air transport Itaú BBA Carrefour NM 509,619,074 20 July 2017 Foods Itaú BBA Omega NM 93,796,916 31 July 2017 Electric energy BTG Pactual IRB NM 318,090,881 31 July 2017 Insurance services Bradesco BBI Camil NM 179,141,094 28 September 2017 Diverse foods Merrill Lynch BK NM 369,823,387 18 December 2017 Restaurant and similar services Itaú BBA Subtotal 2,045,150,622 8 Total 7,701,028,016 58

Appendix 1

Table AI

Appendix 2

Table AII

References

ABVCAP (2018). Inside VC in Brazil. Associação Brasileira de Private Equity & Venture Capital, Available from: www.abvcap.com.br/Download/Estudos/3947.pdf (accessed 12 May 2018).

Akerlof, G. (1970). The market for lemons: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(3), 488–500.

Altynnikova, A., & Sarampasina, E. (2017). Private equity ownership and its effect on underpricing: evidence from Swedish IPOs. Bachelor’s thesis, Department of Business Studies, Uppsala University, Uppsala, Available from: www.diva-portal.org/smash/get/diva2:1113480/ATTACHMENT01.pdf (accessed 9 September 2018).

B3 (2017). Regulamento do novo mercado. Brasil, Bolsa, Balcão, Available from: www.b3.com.br/pt_br/regulacao/estrutura-normativa/listagem/ (accessed 24 August 2018).

Bacen (2018a). Produto interno bruto – Taxa de variação real no ano. Banco Central Do Brasil, Available from: www3.bcb.gov.br/sgspub/consultarvalores/consultarValoresSeries.do?method=consultarValores (accessed 25 March 2018).

Bacen (2018b). Selic anualizada base 252 – % a.a. Banco Central Do Brasil, Available from: https://www3.bcb.gov.br/sgspub/consultarvalores/consultarValoresSeries.do?method=consultarValores (accessed 25 March 2018).

Baker, M., & Wurgler, J. (2002). Market timing and capital structure. The Journal of Finance, 57(1), 1–32.

Barry, C. B. (1994). New directions in research on venture capital finance. Financial Management, 23(3), 3–15.

Barry, C. B., Muscarella, C. J., & Peavy, J. W. (1990). The role of venture capital in the creation of public companies. Journal of Financial Economics, 27(2), 447–471.

Belghitar, Y., & Dixon, R. (2012). Do venture capitalists reduce underpricing and underperformance of IPOs?. Applied Financial Economics, 22(1), 33–44.

Benveniste, L. M., & Spindt, P. A. (1989). How investment bankers determine the offer price and allocation of new issues. Journal of Financial Economics, 24(2), 343–361.

Bruton, G. D., Chahine, S., & Filatotchev, I. (2009). Founder, private equity investors, and underpricing in entrepreneurial IPOs. Entrepreneurship Theory and Practice, 33(4), 909–928.

Carvalho, A. G., Furtado, C. V., & Ribeiro, L. R. (2006), A Indústria De Private Equity e Venture Capital – Primeiro Censo Brasileiro, São Paulo: Saraiva.

Cornelli, F., & Goldreich, D. (2003). Bookbuilding: how informative is the order book?. The Journal of Finance, 58(1), 1415–1443.

Corrar, L. J., Paulo, E., & Dias Filho, J. M. (2006), Análise Multivariada Para os Cursos De Administração e Economia, São Paulo: Atlas.

Cumming, D., & Johan, S. (2008). Information asymmetries, agency costs and venture capital exit outcomes. Venture Capital: An International Journal of Entrepreneurial Finance, 10(3), 197–231.

CVM (1994). Instrução normativa no. 209/94. Dispõe sobre a constituição, o funcionamento e a administração dos fundos mútuos de investimento em empresas emergentes. Comissão de Valores Mobiliários, Available from: www.cvm.gov.br/export/sites/cvm/legislacao/instrucoes/anexos/200/inst209consolid.pdf (accessed 19 April 2018).

CVM (2003). Instrução normativa no. 391/03. dispõe sobre a constituição, o funcionamento e a administração dos fundos de investimento em participações. Comissão de Valores Mobiliários, Available from: www.cvm.gov.br/legislacao/instrucoes/inst391.html (accessed 19 April 2018).

Dinardo, J., & Johnston, E. J. (2001), Métodos Econométricos, Lisboa: McGraw-Hill.

Drake, P., & Vetsuypens, M. (1993). IPO underpricing and insurance against legal liability. Financial Management, 22(1), 64–73.

Engel, D. (2002). The impact of venture capital on firm growth: an empirical investigation. ZEW – Centre for European Economic Research, 2(2), 2–36.

Fama, E. (1970). Efficient capital markets: a review of theory and empirical work. Journal of Finance, 25(2), 383–417.

Fávero, L. P., Belfiore, P., Silva, F. L., & Chan, B. L. (2009), Análise De Dados: Modelagem Multivariada Para Tomada De Decisões, Rio de Janeiro: Elsevier.

Fernandes, M. (2007). Um estudo sobre o poder de certificação dos fundos de private equity e venture capital nos IPOs realizados no mercado brasileiro. masters dissertation, Rio de Janeiro: Fundação Getúlio Vargas, Available from: http://bibliotecadigital.fgv.br/dspace/handle/10438/13625 (accessed 16 December 2018).

Galozzi, M. (2014). Análise do impacto da estrutura de controle no underpricing de IPOs no Brasil. masters dissertation, Instituto de Ensino e Pesquisa (Insper), São Paulo, Available from: http://dspace.insper.edu.br/xmlui/handle/11224/997 (accessed 16 December 2018).

Gioielli, S. P. O. (2013), Os gestores de private equity e venture capital influenciam a governança corporativa das investidas? Evidências das empresas estreantes na Bovespa, Anbima – Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais, Rio de Janeiro, Available from: www.anbima.com.br/data/files/2C/52/DD/6B/B12E7510E7FCF875262C16A8/tese-ebook_sabrinagioielli_1_.pdf (accessed 9 September 2018).

Goldreich, D. (2003). Bookbuilding: how informative is the order book?. The Journal of Finance, 58(4), 1415–1443.

Gujarati, D. (2006), Econometria Básica, Rio de Janeiro: Elsevier.

Ibbotson, R. G. (1975). Price performance of common stock new issues. Journal of Financial Economics, 2(3), 235–272.

Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2), 323–329.

Jensen, M. C., & Meckling, W. H. (1976). W. Theory of the firm: managerial behavior, agency costs and capital structure. Journal of Financial Economics, 3(4), 305–360.

Lambert, R., Leuz, C., & Verrecchia, R. (2011). Informational asymmetry, information precision, and the cost of capital. Review of Finance, 16(1), 1–29.

Leal, R. P. C. (2000). Por que há retornos anormais nas aberturas de capital: uma revisão da teoria e suas evidências empíricas. In R. P. C. Leal, N. C. A. Jr Costa, & E. F. Lemgruber (Eds), Finanças Corporativas, São Paulo: Atlas, 119-131.

Leite, C. R., & Souza, A. (2001). Os Fundos de Private Equity Como uma alternativa de financiamento de capital de risco às empresas no Brasil, através da participação acionária e administrativa. V seminar in admnistration of economics administration and accounting college of the University of São Paulo, São Paulo.

Lima, D. H. S., Rodrigues, J. M., Silva, C. A. T., & Silva, J. D. G. (2012). Impacto do nível de evidenciação de informações contábeis sobre a precificação de ações no contexto de seleção adversa: uma pesquisa experimental. Revista Brasileira de Gestão de Negócios, 14(43), 159–175.

Loughran, T., & Ritter, J. (2002). Why don’t issuers get upset about leaving the money on the table in IPOs?. The Review of Financial Studies, 15(2), 413–443.

Lucas, D. J., & McDonald, R. L. (1990). Equity issues and stock price dynamics. Journal of Finance, 45(4), 1020–1043.

Megginson, W. L., & Weiss, K. A. (1991). Venture capitalist certification in initial public offerings. Journal of Finance, 46(3), 879–903.

Miller, R. E., & Reilly, F. K. (1987). An examination of mispricing, returns, and uncertainty for initial public offerings. Financial Management, 16(2), 33–38.

Minardi, A., Ferrari, L., & Tavares, P. (2013). Performances of Brazilian IPOS backed by private equity. Journal of Business Research, 66(1), 448–455.

Mogilevsky, V., & Murgulov, Z. (2012). Underpricing of private equity backed, venture capital backed and non-sponsored IPOs. Investment Management and Financial Innovations, 9(3), 47–59.

Oliveira, B. C., & Kayo, E. K. (2015). Desempenho de ações de empresas brasileiras após seu IPO: evidência de curto e de longo prazo. Revista de Gestão, 22(2), 173–186.

Ribeiro, L. (2005). O modelo brasileiro de private equity e venture capital. Masters dissertation, Faculdade de Economia, Administração e Contabilidade, São Paulo: Universidade de São Paulo Available from: www.teses.usp.br/teses/disponiveis/12/12139/tde-02042006-163402/en.php (accessed 16 December 2018).

Ritter, J. R. (1984). The hot issue market of 1980. Journal of Business, 4(3), 215–249.

Rock, K. (1986). Why new issues are underpriced. Journal of Finance Economics, 15(1-3), 187–212.

Rossi, J. L. Jr, & Marotta, M. (2010). Equity market timing: testando através dos IPOs no mercado brasileiro. Revista Brasileira de Finanças, 8(1), 85–101.

Saito, R., & Silveira, A. D. M. (2008). Governança corporativa: custos de agência e estrutura de propriedade. Revista de Administração de Empresas, 48(2), 87–125.

Siegel, S., & Castellan, N. J. Jr (2006), Estatística não-paramétrica para ciências do comportamento, Porto Alegre: Artmed.

Sonoda, F. (2008). Análise da influência do private equity e venture capital no underwriting dos IPOs das empresas brasileiras no período de 2004 a 2007. masters dissertation, São Paulo: Fundação Getúlio Vargas, Available from: http://bibliotecadigital.fgv.br/dspace/handle/10438/2378 (accessed 16 December 2018).

Spatt, C., & Srivastava, S. (1991). Preplay communication, participation restrictions, and efficiency in initial public offerings. Review of Financial Studies, 4(4), 709–726.

Spence, A. M. (1973). Job market signaling. The Quarterly Journal of Economics, 83(3), 355–374.

Stiglitz, J. E. (1985, December 1). Information and economic analysis: a perspective. The Economic Journal, 95, 21–41, Available from: https://doi.org/10.2307/2232867

Sweeney, D. J., Williams, T. A, & Anderson, D. R. (2013), Estatística aplicada à administração e economia, São Paulo: Cengage Learning.

Takahashi, J. T. (2006), Avaliação da carteira de ativos nos fundos de venture capital e private equity, São Paulo: Atlas.

Taranto, M. A. (2002). Why managers are willing to accept IPO underpricing. working paper, Massachusetts Institute of Technology, Massachusetts, MA: University of Massachusetts, February.

Tiniç, S. M. (1988). Anatomy of initial public offerings of common stock. The Journal of Finance, 43(4), 789–822.

Wilcoxon, F. (1945). Individual comparisons by ranking methods. Biometrics Bulletin, 1(6), 80–83.

Williamson, O. E. (1967). Hierarchical control and optimum firm size. Journal of Political Economy, 75(2), 123–138.

Wruck, K. H. (2008). Private equity, corporate governance, and the reinvention of the market for corporate control. Journal of Applied Corporate Finance, 20(3), 8–21.

Further reading

Clegg, S. R., Hardy, C., & Nord, W. R. (1996), Handbook of organization studies, London: Sage Publications.

Cumming, D., & Johan, S. (2014), Venture capital and private equity contracting: an international perspective, San Diego, CA: Elsevier.

Cumming, D., & Macintosh, J. A. (2003). A cross-country comparison of full and partial venture capital exits strategies. Journal of Banking and Finance, 27(3), 511–548.

Dávila, M., & Vásquez, A. (2011). Políticas de incentivos relacionadas com la investigación: uma revisión crítica desde la teoria de contratos. Estudos Gerenciales, 27(120), 127–145.

Hatch, M. J. (1997), Organization theory: modern symbolic and postmodern perspectives, New York, NY: Oxford University Press.

Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. Journal of Accounting and Economics, 31 (1-3), 405–440.

Heeley, M. B., Matusik, S. F., & Jain, N. (2007). Innovation, appropriability, and the underpricing of initial public offerings. Academy of Management Journal, 50(1), 209–225.

Leland, H. E., & Pyle, D. H. (1977). Information asymmetries, financial structure, and financial intermediation. The Journal of Finance, 32(2), 371–387.

Leone, A. J., Rock, S., & Willenborg, M. (2007). Disclosure of intended use of proceeds and underpricing in initial public offerings. Journal of Accounting Research, 45(1), 111–153.

Lima, G., Securato, J., & Testa, C. (2013). O desempenho de longo prazo dos IPOS: evidências de empresas investidas por fundos de private equity e venture capital. XVI seminar in administration of economics administration and accounting college of the University of São Paulo, São Paulo.

Stock, J. H., & Watson, M. W. (2004), Econometria, São Paulo: Addison Wesley.

Vissers, P. (2016). Innovative firms and IPO underpricing. Masters dissertation, Tilburg School of Economics and Management, Tilburg: Tilburg University, Available from: http://arno.uvt.nl/show.cgi?fid=142060 (accessed 16 December 2018).

HTML generated from XML JATS4R