Crossed Wires: Endorsement Signals and the Effects of IPO Firm Delistings on Venture Capitalists’ Reputations
研究了风险投资公司背书的IPO公司退市如何损害风投声誉，发现声誉高的风投因背书失败而遭受更大声誉损失，而上市后市场表现和生存时间能减轻这种损害。
Signaling theorists have paid a great deal of attention to the costs of acquiring characteristics that can serve as signals, such as endorsements from reputable third parties. However, limited attention has been devoted to the penalty costs associated with providing inaccurate signals and the factors that can exacerbate or attenuate the penalties. We examine the effect of negative feedback loops on venture capital (VC) firms’ reputations that result from the failures (delistings) of the newly public firms they once endorsed. Drawing on signaling and attribution theories, we argue that endorsements by reputable VC firms create high expectations that, when violated, cause stakeholders to look for scapegoats, resulting in reputational damage to the endorsing VCs. We find empirical support for this argument, and for the attenuating effect of both post-IPO market performance and survival. Our study contributes to the conversation about endorsements as signals, and empirically tests the implicit assumption that endorsements place the reputation of the endorser at risk.