Third-party certification and post-IPO acquisitions

Magnus Blomkvist, Karl Felixson, Anders Löflund*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Peer-reviewed scientific journalApplied Economics
Volume52
Issue number31
Pages (from-to)3436-3447
Number of pages12
ISSN0003-6846
DOIs
Publication statusPublished - 07.01.2020
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Corporate Investment
  • M&A
  • IPO
  • Third-party certification
  • Valuation uncertainty

Sustainable Development Goals

  • GOAL 09: Industry, Innovation and Infrastructure

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance

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