Third-party certification and post-IPO acquisitions |
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Authors: | Magnus Blomkvist Karl Felixson |
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Affiliation: | 1. Audencia Business School – Nantes , Nantes, France;2. Hanken School of Economics , Helsinki, Finland |
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Abstract: | ABSTRACT We explore the link between third-party certification (venture capital backing, analyst following and having a top underwriter), and post-IPO acquisition activity through the reduction in valuation uncertainty channel. In a sample of 2,424 U.S. IPOs, we find that third-party certification facilitates post-IPO acquisitions. The certified firms are both more likely and conduct acquisitions sooner after the IPO. Our results support the notion that third-party certification reduces post-IPO valuation uncertainty and thereby facilitates a more efficient acquisition strategy. |
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Keywords: | Corporate Investment M& A IPO Third-party certification Valuation uncertainty |
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