Back to Search
Start Over
Institutional investor attention and venture capital valuation: evidence from China.
- Source :
- Applied Economics Letters; Jul2023, Vol. 30 Issue 12, p1571-1577, 7p, 5 Charts
- Publication Year :
- 2023
-
Abstract
- This paper analyzes how institutional investor attention affects firm valuations in the venture capital market. Relying on research reports of financial institutions in China, we propose a direct measure of abnormal institutional attention to industries (AIA) after eliminating industry differences and heteroscedasticity. We find that firm valuation is positively associated with institutional investor attention. Our conclusion continues to hold after controlling for selection bias and validating different measures of AIA. In addition, we find a negative relationship between AIA and the performance of VC investments measured by the likelihood of successful exits. Our findings support the notion that an increase in venture valuations is overpricing caused by institutional attention rather than a fundamental premium. [ABSTRACT FROM AUTHOR]
- Subjects :
- MARKET sentiment
VENTURE capital
INSTITUTIONAL investors
VALUATION
CAPITAL market
Subjects
Details
- Language :
- English
- ISSN :
- 13504851
- Volume :
- 30
- Issue :
- 12
- Database :
- Complementary Index
- Journal :
- Applied Economics Letters
- Publication Type :
- Academic Journal
- Accession number :
- 163953954
- Full Text :
- https://doi.org/10.1080/13504851.2022.2071827