Difference between revisions of "Brander Egan (2007) - The Role of VCs in Acquisitions"
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Brander, James A. and Edward J. Egan (2008), "The Role of Venture Capitalists in Acquisitions", University of British Columbia, Working Paper. Proceedings of the Annual Conference, Administrative Science Association of Canada, Banff, Alberta (June ‘06), | Brander, James A. and Edward J. Egan (2008), "The Role of Venture Capitalists in Acquisitions", University of British Columbia, Working Paper. Proceedings of the Annual Conference, Administrative Science Association of Canada, Banff, Alberta (June ‘06), | ||
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| + | ==File(s)== | ||
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| + | *[[Media:Brander_Egan_(2007)_-_The_Role_of_VCs_in_Acquisitions.doc | Brander Egan (2007) - The Role of VCs in Acquisitions (Working Paper)]] | ||
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| + | ==Keywords== | ||
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| + | Acquisitions, Venture Capital, Information Technology, Information Asymmetry | ||
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| + | ==Abstract== | ||
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| + | We study the effect of venture capital on returns to acquisitions of privately-held enterprises. One hypothesis is that venture capital provides “certification” of acquisition target quality under asymmetric information and therefore yields higher acquisition prices. An alternative “bargaining” hypothesis is that venture capitalists obtain higher acquisition prices through superior bargaining. An event study of U.S. acquisitions in the 1980-2006 period indicates that venture capital lowers abnormal returns (implying higher acquisition prices) for Information Technology (IT) acquisitions but not for other acquisitions. As evidence suggests that IT has relatively high levels of informational asymmetry, our analysis favors the certification hypothesis. | ||
==Status== | ==Status== | ||
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This paper is currently: | This paper is currently: | ||
*WP: An unpublished working paper | *WP: An unpublished working paper | ||
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==To Do== | ==To Do== | ||
*Bring data up to date | *Bring data up to date | ||
| − | * | + | *Rewrite it again |
*Send it somewhere! | *Send it somewhere! | ||
Revision as of 20:46, 16 February 2012
Summary
This is a Working Paper. Please do not distribute.
This paper is listed under:
- Venture Capital Research
Reference
Brander, James A. and Edward J. Egan (2008), "The Role of Venture Capitalists in Acquisitions", University of British Columbia, Working Paper. Proceedings of the Annual Conference, Administrative Science Association of Canada, Banff, Alberta (June ‘06),
File(s)
Keywords
Acquisitions, Venture Capital, Information Technology, Information Asymmetry
Abstract
We study the effect of venture capital on returns to acquisitions of privately-held enterprises. One hypothesis is that venture capital provides “certification” of acquisition target quality under asymmetric information and therefore yields higher acquisition prices. An alternative “bargaining” hypothesis is that venture capitalists obtain higher acquisition prices through superior bargaining. An event study of U.S. acquisitions in the 1980-2006 period indicates that venture capital lowers abnormal returns (implying higher acquisition prices) for Information Technology (IT) acquisitions but not for other acquisitions. As evidence suggests that IT has relatively high levels of informational asymmetry, our analysis favors the certification hypothesis.
Status
This paper has been submitted to and rejected from:
- JF: The Journal of Finance (submitted Sept '05, rejected immediately)
- JEMS: The Journal of Economics and Management Strategy (submitted '06?, rejected after 3 revisions)
- JSBM: The Journal of Small Business Management (submitted Oct '06, rejected after 2 revisions)
- JBV: The Journal of Business Venturing (submitted Jan '07, rejected after 2 revisions)
- RFS: Review of Financial Studies (submitted Apr '08, rejected immediately)
- JBF: The Journal of Banking and Finance (submitted '09?, rejected immediately)
This paper was presented at:
- The Annual Conference, Administrative Science Association of Canada, Banff, Alberta (June ‘06)
This paper is currently:
- WP: An unpublished working paper
To Do
- Bring data up to date
- Rewrite it again
- Send it somewhere!
