How can new ventures command a price premium with innovations in emerging markets?
研究中国新创企业如何利用风险投资和承销商背书，在IPO中通过创新信号降低信息不对称，从而提高投资者支付意愿。
Successful financing is critical for new ventures' survival and future sustainable growth. With the unique institutional characteristics, it is especially difficult for new ventures in emerging economies to transform innovation capital into favorable investor responses (such as willingness‐to‐pay, WTP) during the process of initial public offerings (IPOs). Based on the patent records from a unique sample of Chinese firms, we demonstrate that new ventures can successfully leverage innovation for higher WTP in IPOs contingent on the existence of venture capital ownership and reputable underwriter endorsements. These financial intermediates can send inside‐out and outside‐in signals to market investors to reduce information asymmetry. Our study contributes to research on the valuation of innovations in IPOs. We also provide practical implications to managers and investors of new ventures. We provide implication to managers and investors of new ventures on how to increase the benefits from innovations, which fosters national economic growth and social welfare.