Table 5 provides evidence relating to the prediction concerning underpricing. In which regressions is the evidence consistent with the prediction, and in which regressions is the evidence inconsistent with the prediction? Specifically, what is the dependent variable, which are the key independent variables for testing the prediction, and describe what their signs and significances across the six regressions tell you. Table 16.5 Regressions for underpricing of the IPO Independent variables Venture firm less than six years Dependent variable First-day return-underpricing 0.076 1262 0.088 122401 0.031 1000
Table 5 provides evidence relating to the prediction concerning underpricing. In which regressions is the evidence consistent with the prediction, and in which regressions is the evidence inconsistent with the prediction? Specifically, what is the dependent variable, which are the key independent variables for testing the prediction, and describe what their signs and significances across the six regressions tell you. Table 16.5 Regressions for underpricing of the IPO Independent variables Venture firm less than six years Dependent variable First-day return-underpricing 0.076 1262 0.088 122401 0.031 1000
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
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Question
![Table 5 provides evidence relating to the prediction concerning underpricing. In which regressions is the
evidence consistent with the prediction, and in which regressions is the evidence inconsistent with the
prediction? Specifically, what is the dependent variable, which are the key independent variables for testing
the prediction, and describe what their signs and significances across the six regressions tell you.
Table 16.5
Regressions for underpricing of the IPO
Independent variables
Venture firm less than six years
old
Logarithm of venture firm age
Number of IPOs in previous
four months
Logarithm of IPO offering size
Standard deviation of stock
return
Logarithm of IPO company age
Logarithm of length of board
service
Underwriter rank
Venture capital under
management
Constant
R²
p-Value of F-test
Number of observations
Dependent variable
First-day return-underpricing
0.076
13.82]
-0.001
[ 4.91]
0.037
(3.26]
1.77
[3.28]
-0.548
1-2.891
0.248
0.000
337
0.088
13.49]
-0.001
| 4.90]
0.062
[4.49]
2.22
[3.35]
0.002
10.15]
-0.015
[-1.64]
0.031
(0.98)
0.072
[4.05]
-0.001
-0.001
-0.001
-0.001
[ 3.70] [ 4.82] [-4.78] [-3.70
0.036
[3.19]
1.40
[195]
-0.008
[-0.49]
-0.004
[-1.23]
-0.022
[-2.50]
-0.0001
[-1.68]
-0.910
-0.861
[-3.66] [-2.97]
0.339
0.363
0.000
0.000
-0.040 -0.052
[ 3.89] [-4.07]
190
1.75
[3.24]
0.061
[4.50]
2.15
[3.29]
0.002
[0.17]
-0.020
[-1.18]
-0.424
-0.744
[-2.29] [-3.15]
0.249
0.352
0.000
0.000
241
0.071
[4.00]
1.37
[1.94]
-0.018
-0.005
[-1.69] [-1.31]
-0.007
[-0.45]
-0.22
[-2.51]
0.0001
[1.94]
-0.767
[-2.80]
0.365
0.000
241
190
Note: The sample is 433 venture-backed IPOs from 1978-1987. The dependent variable is underpricing of
the IPO (Le, the first-day return on the IPO firm). Independent variables include a dummy variable that equals
one if the venture organization is less than six years old, the logarithm of the lead venture capital firm's age in
months, the cumulative number of IPOs (both venture backed and non-venture backed) in the previous four
months, the logarithm of IPO offering size, the standard deviation of the stock returns from day 2 to day 20
after the IPO, the natural logarithm of the IPO company's age in months, the logarithm of the number of
months that the lead venture capitalist has been on the company's board of directors, the Carter and Manaster
(1990) underwriter rank, and the capital under management at the lead venture capital firm. All regressions in-
clude industry dummy variables to control for any fixed effects. Coefficients on industry dummies are not
reported. I-statistics are in brackets.]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6ebcfa6a-6e4b-4125-bc88-71ab5b3e281c%2F70836c71-7af6-4093-9366-a69bfb89c935%2Frjhp62r.jpeg&w=3840&q=75)
Transcribed Image Text:Table 5 provides evidence relating to the prediction concerning underpricing. In which regressions is the
evidence consistent with the prediction, and in which regressions is the evidence inconsistent with the
prediction? Specifically, what is the dependent variable, which are the key independent variables for testing
the prediction, and describe what their signs and significances across the six regressions tell you.
Table 16.5
Regressions for underpricing of the IPO
Independent variables
Venture firm less than six years
old
Logarithm of venture firm age
Number of IPOs in previous
four months
Logarithm of IPO offering size
Standard deviation of stock
return
Logarithm of IPO company age
Logarithm of length of board
service
Underwriter rank
Venture capital under
management
Constant
R²
p-Value of F-test
Number of observations
Dependent variable
First-day return-underpricing
0.076
13.82]
-0.001
[ 4.91]
0.037
(3.26]
1.77
[3.28]
-0.548
1-2.891
0.248
0.000
337
0.088
13.49]
-0.001
| 4.90]
0.062
[4.49]
2.22
[3.35]
0.002
10.15]
-0.015
[-1.64]
0.031
(0.98)
0.072
[4.05]
-0.001
-0.001
-0.001
-0.001
[ 3.70] [ 4.82] [-4.78] [-3.70
0.036
[3.19]
1.40
[195]
-0.008
[-0.49]
-0.004
[-1.23]
-0.022
[-2.50]
-0.0001
[-1.68]
-0.910
-0.861
[-3.66] [-2.97]
0.339
0.363
0.000
0.000
-0.040 -0.052
[ 3.89] [-4.07]
190
1.75
[3.24]
0.061
[4.50]
2.15
[3.29]
0.002
[0.17]
-0.020
[-1.18]
-0.424
-0.744
[-2.29] [-3.15]
0.249
0.352
0.000
0.000
241
0.071
[4.00]
1.37
[1.94]
-0.018
-0.005
[-1.69] [-1.31]
-0.007
[-0.45]
-0.22
[-2.51]
0.0001
[1.94]
-0.767
[-2.80]
0.365
0.000
241
190
Note: The sample is 433 venture-backed IPOs from 1978-1987. The dependent variable is underpricing of
the IPO (Le, the first-day return on the IPO firm). Independent variables include a dummy variable that equals
one if the venture organization is less than six years old, the logarithm of the lead venture capital firm's age in
months, the cumulative number of IPOs (both venture backed and non-venture backed) in the previous four
months, the logarithm of IPO offering size, the standard deviation of the stock returns from day 2 to day 20
after the IPO, the natural logarithm of the IPO company's age in months, the logarithm of the number of
months that the lead venture capitalist has been on the company's board of directors, the Carter and Manaster
(1990) underwriter rank, and the capital under management at the lead venture capital firm. All regressions in-
clude industry dummy variables to control for any fixed effects. Coefficients on industry dummies are not
reported. I-statistics are in brackets.]
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