ABSTRACT
This chapter introduces the data and methods that will be used to test the hypotheses. The author collected all the IPO and performances data of all 372 firms newly listed in KOSDAQ, about half of which are backed by venture capital companies, during the period of 1999–2001. This chapter explains the concepts and definitions of “stock market performance” in terms of underpricing and long-term performance, which will be used as dependent variables in the univariate and multivariate analysis. After that, this chapter sets out the specification of the multivariate regression model that will be carried out in later chapters. The author describes, in particular, the independent variables that represent VC-backing, the reputation of VC-backing, the different organisational types of VC-backing and the reputation of underwriter and auditor, and several other control variables that will be used as proxies of firm characteristics and stock market situation. The author specifies five multivariate regression models that will be implemented in order to test the hypotheses.
