This paper tests whether the junior public equity markets serve as an effective development market for early-stage firms compared to private venture capital (VC). Focusing on the Canadian market, we compare the long-run stock performance of firms that graduate from the Toronto Venture Stock Exchange (TSX-V) to the Toronto Stock Exchange (TSX) against the performance of VC-backed firms that have a direct IPO on the TSX. Controlling for various confounders and possible selection biases, we find that TSX-V graduations significantly outperform VC-backed IPOs by 28.2 percentage points in the three years following the TSX listing. Our results are consistent with the idea that a TSX-V listing provides the insiders of early-stage companies with valuable public-markets experience.
(2018). Can Spending Time in the Minors Pay Off? An Examination of the Canadian Junior Public Equity Markets [journal article - articolo]. In JOURNAL OF SMALL BUSINESS MANAGEMENT. Retrieved from http://hdl.handle.net/10446/116740
Can Spending Time in the Minors Pay Off? An Examination of the Canadian Junior Public Equity Markets
Meoli, Michele;Vismara, Silvio
2018-01-01
Abstract
This paper tests whether the junior public equity markets serve as an effective development market for early-stage firms compared to private venture capital (VC). Focusing on the Canadian market, we compare the long-run stock performance of firms that graduate from the Toronto Venture Stock Exchange (TSX-V) to the Toronto Stock Exchange (TSX) against the performance of VC-backed firms that have a direct IPO on the TSX. Controlling for various confounders and possible selection biases, we find that TSX-V graduations significantly outperform VC-backed IPOs by 28.2 percentage points in the three years following the TSX listing. Our results are consistent with the idea that a TSX-V listing provides the insiders of early-stage companies with valuable public-markets experience.File | Dimensione del file | Formato | |
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