All Ties are Not Created Equal : Institutional Equity Ties, IPO Performance, and Market Growth of New Ventures

This study examines whether and how different types of institutional ties affect new venture performance at different organizational stages. We propose that equity ties to government agencies will enhance the speed and returns of IPO but hinder post-IPO market growth. By contrast, we posit that equity ties to research institutes will contribute positively to both IPO performance and post-IPO market growth. We build our arguments on how the two types of institutional ties meet new ventures' need to be legitimate and competitive pre- and post-IPO. We test our hypotheses with new ventures in the pharmaceutical and chemical industries that went public in China and find supportive evidence for our arguments