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Journal of Banking & Finance Vol. 35 No. 12 2011

Monitoring via staging: Evidence from Private investments in public equity

Na Dai

University at Albany, State University of New York

Abstract

I study the causes and consequences of staging in the setting of private investments in public equities (PIPEs). I find that, in PIPE investments, as in venture capital staging, the staging strategy is used by investors as a monitoring mechanism to mitigate information asymmetry and agency problems. Moreover, strategic investors and investors investing alone are more likely to utilize staging. I show also that staging reduces the cost of financing and has positive implications for PIPE issuers’ long-run stock performance.

DOI
10.1016/j.jbankfin.2011.05.022
Volume
35
Issue
12
Pages
3417-3431
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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