تالار تخصصی حسابداری

«Public Venture Capital Investments»

The Effects of Public Venture Capital
Investments on Corporate Governance:
Evidence From IPO Firms in
Emerging Marketsabac_358 86..103
This study examines the impact of public venture capital (hereafter PVC)
investments on corporate governance of initial public offering (hereafter
IPO) firms in emerging markets. Using data collected from Taiwan PVC
investments during 1996–2005, we analyse three corporate governance
features in IPO firms: earnings management, board characteristics, and
excess control by controlling shareholders.We find that PVC-backed firms
use fewer accounting accruals in their IPO financial statements than non-
PVC-backed firms.This result suggests that PVC-backed IPO firms engage
in less earnings management than non-PVC-backed IPO firms.We also find
PVC-backed firms tend to set up their boards with fewer non-independent
directors and supervisors at IPO. This result indicates that PVC-backed
IPO firms have better board structures than non-PVC-backed IPO firms.
Finally, we find that controlling shareholders are less likely to exert excess
control in PVC-backed firms than in non-PVC-backed firms. Overall, our
results indicate that PVC investments add value to new IPO firms not only
in financing their capital needs but also in creating better corporate governance
structures in emerging markets