Venture Capitalists, Business Angels, and Performance of Entrepreneurial IPOs in the UK and France

Abstract:  Using a unique sample of 444 entrepreneurial IPOs in the UK and France, this paper analyses the investment patterns and the stock-market performance effects of two types of early stage investors: venture capitalists (VCs) and business angels (BAs). Extending existing research, we identify important endogeneity and institutional effects. Our findings indicate that UK IPOs have a higher retained ownership and lower participation ratio by BAs, but a lower retained ownership and participation ratio by VCs than in France. BA and VC investments are substitutes, and they are endogenously determined by a number of firm- and founder-related factors, such as founder ownership and external board 'interlocks', and underwriter reputation. UK VCs are effective third-party certifying agents who reduce underpricing in UK IPOs, whereas in French IPOs they increase it by appearing to engage in grandstanding. This certification effect is more significant in UK IPOs involving both high VC and BA ownership. Finally, underpricing increases with VC participation ratio, where the higher exit of VCs seems to increase the risk premium required by outside investors, in particular in the UK.     

Towards a model of cross-sectoral policy development in leisure: the case of sport and tourism

Whilst leisure studies has now become an established field of academic analysis, there is still little literature on the dynamics of the leisure policy process, particularly in the area of cross-sectoral liaison. This paper attempts to synthesize previous research relating to general policy dynamics in developing a model of cross-sectoral policy development. In developing this model, particular attention is given to two major ESRC funded projects of the 1980s – work on Inter-Governmental Relations and Government Industry Relations – which produced two recognizably different models of the policy process. A combined model is proposed which is used to examine and compare the structures of the sport and the tourism policy communities and to analyse how these structures might effective the emergence of a sport-tourism policy network. In conclusion, the extent to which the model this paper develops might be applicable to other areas of leisure policy is discussed.     

Recreational betting: individual betting profiles

This paper complements a previous article (Filby and Harvey, 1988) on aggregate betting patterns by describing in some detail the betting patterns and strategies of individual punters. The habits of 67 regular punters drawn from three Birmingham betting shops are analysed on the basis of the evidence of their betting slips. While the discussion bears witness to the effort invested in betting activity by punters, it also urges some caution in overinterpreting the intellectual work in betting. Many of the punters display fairly routinized decision-making in the construction and staking of their bets, which holds across the two main groups of punters identified in the analysis.     

Moving from Private to Public Ownership: Selling Out to Public Firms versus Initial Public Offerings

We study two alternative means to move assets from private to public ownership: through the acquisition of private companies by firms that are public (sellouts) or through initial public share offerings (IPOs). We consider firm-specific characteristics for 1,074 IPO and 735 sellout firms to identify differences in growth, capital constraints, and asymmetric information between the two types of transactions. Our results suggest that firms move to public ownership through an IPO when they have greater growth opportunities and face more capital constraints. We provide a better understanding of the firm-specific characteristics that lead firms to go public.     

One Share - One Vote: the Theory

The theoretical literature on security-voting structure canbe organized around three questions: What impact do nonvotingshares have on takeover outcomes? How does disproportional votingpower affect the incentives of blockholders? What are the repercussionsof mandating one share - one vote for firms' financing and ownershipchoices? Overall, the costs and benefits of separating cashflow and votes reflect the fundamental governance trade offbetween disempowering blockholders and empowering managers.It is therefore an open question whether mandating one share- one vote would improve the quality of corporate governance,notably in systems that so far relied on active owners.     

Where is the opportunity in opportunity zones?

In December 2017, the U.S. Congress passed into law the Opportunity Zone (OZ) program. As an OZ, designated low-income census tracts provide considerable tax breaks to property investors, intending to attract investments and spur economic growth. As the success of the program is dependent on investors' responses, we analyze market reactions in a difference-in-differences framework. We identify two potential effects on property markets: tax breaks for investors and expected land value appreciation. Our results show that tax breaks are priced efficiently. Qualified properties increase by 7–20% in price, while vacant land increase up to 37%. In contrast, we find limited signs of expected land value appreciation.     

Forecasting Intraday Volatility and Value-at-Risk with High-Frequency Data

In this paper, we develop modeling tools to forecast Value-at-Risk and volatility with investment horizons of less than one day. We quantify the market risk based on the study at a 30-min time horizon using modified GARCH models. The evaluation of intraday market risk can be useful to market participants (day traders and market makers) involved in frequent trading. As expected, the volatility features a significant intraday seasonality, which motivates us to include the intraday seasonal indexes in the GARCH models. We also incorporate realized variance (RV) and time-varying degrees of freedom in the GARCH models to capture more intraday information on the volatile market. The intrinsic tail risk index is introduced to assist with understanding the inherent risk level in each trading time interval. The proposed models are evaluated based on their forecasting performance of one-period-ahead volatility and Intraday Value-at-Risk (IVaR) with application to the 30 constituent stocks. We find that models with seasonal indexes generally outperform those without; RV can improve the out-of-sample forecasts of IVaR; student GARCH models with time-varying degrees of freedom perform best at 0.5 and 1 % IVaR, while normal GARCH models excel for 2.5 and 5 % IVaR. The results show that RV and seasonal indexes are useful to forecasting intraday volatility and Intraday VaR.