Signal Power of Technological and Financial Variables in Venture Capital

44 Pages Posted: 13 Apr 2001

See all articles by Kangmao Wang

Kangmao Wang

Zhejiang University - School of Business Administration

Weenian Chua

affiliation not provided to SSRN

William L. Megginson

University of Oklahoma

Date Written: January 2001

Abstract

The primary purpose of this study is to evaluate the signaling powers of technology and traditional factors and their stability. The results show that traditional factors dominate the signaling process. In addition, they are also relatively stable over periods of changing investor's sentiment. Among the technology factors, R&D personnel exhibit the most consistent results. However, even this factor is affected by investor sentiment as shown by its insignificance in the 'after crash' period. On the other hand, two of the traditional factors, underpricing and underwriters' reputation, display reliable results in different models and different sub periods. Reasons for the results can be linked to several explanations, such as the superior information conveyed by the traditional factors and the long-term effect of technology factors.

Keywords: Venture capital, signaling

JEL Classification: D82, G14, G24

Suggested Citation

Wang, Kangmao and Chua, Weenian and Megginson, William L., Signal Power of Technological and Financial Variables in Venture Capital (January 2001). Available at SSRN: https://ssrn.com/abstract=263782 or http://dx.doi.org/10.2139/ssrn.263782

Kangmao Wang

Zhejiang University - School of Business Administration ( email )

20 Yugu Road
Hangzhou 310027
China
86-571-8796-8455 (Phone)
86-571-8796-8455 (Fax)

Weenian Chua

affiliation not provided to SSRN

No Address Available

William L. Megginson (Contact Author)

University of Oklahoma ( email )

307 W Brooks, 205A Adams Hall
Norman, OK 73019
United States
(405) 325-2058 (Phone)
(405) 325-1957 (Fax)

HOME PAGE: http://faculty-staff.ou.edu/M/William.L.Megginson-

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