Research On VC Feature, Reduction Behavior After The IPO And Excess Return

Since entering the public view,Venture capital institutions is regarded as the bridgebetween the link enterprise ownership and management rights, promoting institutionalinvestors and entrepreneurs and venture capital, and "incubator","booster" and"personal expert" of the entrepreneurial enterprises. However, venture capitalinstitutions，in the process of promoting gem enterprise innovation and the rapidwealth, have exposed a fantastic demon about reduction: when the lock time releases，stand up and leave、reduce to get cash immediately. This phenomenon is not onlyextremely unfavorable for the follow-up management of venture enterprises, and willmake the ordinary investors which are at the end of the "stock market relay" sufferheavy losses, even may cause the two secondary market stock price volatility, theoperation risks of GEM.Therefore, it has the important theory value and practicalsignificance to study the relationship between characteristic of VC, reduction after IPOand its excess return.Firstly, the paper analyzes the meaning, the concept， exit way and feature of VCand, and reviews the achievement about characteristic of VC,reduction after IPOand its excess return, then makes a brief review of the existing literature, the researchdirection of this article. Secondly, the paper analyzes current situation of venture capitalmarket and the GEM; the interaction between venture capital, GEM and entrepreneurialenterprises; depth analysis of reduction situation, reasons and economic consequencesof VC. Again, this paper selects89listing Corporation,105venture capital mechanismto reduce cash records as research samples from the GEM from October31,2009toDecember31,2011；utilizes the theoretical tool，include the research hypothesis,descriptive statistics, correlation analysis, event study method and multiple linearregression，to study the relationship between characteristic of VC,reduction after IPOand its excess return.Empirical study found that:(1) average excess return of enterprise appears aninverted "V" of the situation at reduction window period of VC after IPO. This kind ofphenomenon proves that VC gets return that exceed the normal return at the process ofexit, mean that reduction behavior of most VC presents characteristic of opportunismabout timing.(2) VC reputation level and accumulated excess returns from reduction after IPO presents a negative correlation；compared to the non VC institutions, excessreturns of VC after the IPO are lower; The higher the proportion of shareholding, excessreturn of VC from reductionafter IPO is lower；Compared to the foreign VC, excessreturn of the state-owned VC is lower, the private is higher.(3) VC reputation ispositively related the first time about reduction；is negative related the proportion offirst reduction and total reduction ratio；The higher the proportion of shareholding, thefirst time about reductionafter IPO is longer，the proportion of first reduction and totalreduction ratio arebigger；Compared with the the non-joint VC, reduction desire of thejoint VC after the IPO is relatively weak——the first reduction time is longer, the firstreduction ratio is smaller, the cumulative reduction ratio smaller;the first reduction timeof ihe foreign VC and the state-owned VC had no significant difference, rather thanprivate VC longer; In the first reduction ratio, of venture capital institutions differenceabout three background VC was not obvious; in the total reduction ratio, the foreign VCis bigger than the state-owned VC，and is smaller than the private.Finally, based on analysis and empirical analysis, the paper mainly put forward twoaspects from strengthening effect about Venture reputation mechanism(such as improvethe reputation of the evaluation criteria of venture capital institutions, strengthenissuance examination committee members to review past actions of venture capitalinstitutions from, establish IPO vetting deposit system, and so on), regulate thebehavior of venture capital institutions (perfect venture capital executives incentive andrestraint mechanisms, thorough investigate of the behavior of venture capital institutionssurprise shares).