The role of venture capitalist monitoring in mitigating cost stickiness: Evidence from Korea's IPO market

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초록

This study investigates the monitoring role of venture capitalists in mitigating the degree of cost stickiness, which may stem from optimistic issuers intoxicated by the prosperous environment surrounding IPOs. In Korea's KOSDAQ market, we find that an issuing company managed by optimistic issuers is affected by cost stickiness after the offering. However, this cost stickiness decreases with the presence and the percentage ownership of long-term VCs. Our findings imply the role of VC monitoring in restraining issuers’ suboptimal decisions in an emerging IPO market. © 2022 Elsevier Inc.

키워드

Cost stickinessEmpire-building preferencesInitial public offeringManagerial optimismVenture capitalistEARNINGS MANAGEMENTCORPORATE GOVERNANCEMANAGERIAL OPTIMISMOVERCONFIDENCEPERFORMANCEBEHAVIOR
제목
The role of venture capitalist monitoring in mitigating cost stickiness: Evidence from Korea's IPO market
저자
Yang, DaecheonKoo, J.-H.Kim, J.
DOI
10.1016/j.frl.2022.103560
발행일
2023-03
유형
Article
저널명
Finance Research Letters
52