| Summary: | 碩士 === 世新大學 === 財務金融學研究所(含碩專班) === 100 === This paper major focuses on the initial public offering (IPO) return of the companies with prior venture capital (VC) involvement. Among these IPO companies , in some cases the prior involved VCs decide to continually hold some share after the IPO , while in other cases they don’t hold any share. A natural question is : Does the decision of still holding shares or not reflect some private information of the involved VC? If so, perhaps those IPO companies whose stocks the involved VC still holds a part would have better performances. Thus, I would like to know whether the VC continually-owned companies have higher short-term and/or long-term after IPO returns.
I collect the data of the IPO companies in the Taiwan TSE and OTC markets form 1995 to 2008. Standard event study method and regression analysis are used to analyze the data. The controlling variables include the IPO size , the age of the company to the IPO date and an industry dummy.
I find that：
1.The VC continually-owned companies do have significantly higher short-term abnormal after IPO returns, but not so for the long-term return.
2.The holding level of the VC for their continually-owned companies’s shares significantly explains the short-term(less than half a year) abnormal after IPO returns. The higher the VC holding level, the higher the after IPO abnormal return. Once again for long-term returns, there is no such relation, the smaller the positive relationship.
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