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.
- 512 Business and Management
- Corporate Investment
- Third-party certification
- Valuation uncertainty
Areas of Strength and Areas of High Potential (AoS and AoHP)
- AoS: Financial management, accounting, and governance