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The present paper investigates the IPO first day return and post ...

The present paper investigates the IPO first day return and post ...

Dependent variable

Dependent variable Change in ROA (1) (2) (3) (4) (5) Political bridging social capital 0.026*** 0.023*** (3.417) (3.084) Pre-IPO Political bridging social capital 0.017* 0.025*** (1.972) (2.616) Post-IPO political bridging social capital 0.022** 0.015 (2.074) (1.387) External investorbridging social capital 0.260*** 0.269*** 0.282*** 0.279*** 0.341*** (4.095) (3.968) (4.089) (4.056) (4.274) Intra-group bonding social capital -0.017*** -0.017*** -0.016*** -0.015*** -0.015** (-4.015) (-4.017) (-3.727) (-3.605) (-2.539) Proceeds raised -0.010*** -0.009** -0.009** -0.008* -0.009** (-3.148) (-2.236) (-2.220) (-1.919) (-2.040) Ln (total assets) 0.019*** 0.024*** 0.024*** 0.024*** -0.039** (2.908) (3.317) (3.320) (3.372) (-2.211) If CEO is chairman 0.007 0.006 0.012 0.002 (0.754) (0.659) (1.358) (0.168) Board size -0.025 -0.025 -0.028* -0.039** (-1.458) (-1.452) (-1.671) (-2.211) Board independence -0.054 -0.050 -0.048 -0.078 (-0.908) (-0.824) (-0.813) (-1.346) IPO first-day return (firm) 0.007 0.007 0.009 0.004 (1.047) (0.993) (1.460) (0.623) IPO first-day return (market) -0.000 -0.000 -0.000 0.000 (-0.477) (-0.430) (-0.515) (0.299) constant -0.453*** -0.491*** -0.500*** -0.510*** -0.485*** (-3.527) (-3.330) (-3.329) (-3.424) (-3.171) Adjusted R 2 0.279 0.278 0.251 0.249 0.341 F statistic 5.095 4.085 3.687 3.741 3.293 No. Obs. 170 169 169 175 169 34

Table 5 OLS regression of the effect of social capital on post-IPOmarket performance Dependent variable Post-IPO3-year stock abnormal return (1) (2) (3) (4) (5) Political bridging social capital 0.835** 0.853** (2.224) (2.093) Pre-IPO Political bridging social capital 1.022** 1.187** (2.248) (2.504) Post-IPO political bridging social capital 1.452*** 1.351** (2.704) (2.597) External investor bridging social capital -0.586 -1.582 -1.172 -2.132 -0.299 (-0.183) (-0.425) (-0.315) (-0.590) (-0.071) Intra-group bonding social capital -0.446** -0.466** -0.431* -0.418* -0.547* (-2.109) (-2.048) (-1.921) (-1.948) (-1.908) Proceeds raised -0.140 -0.099 -0.122 -0.034 -0.144 (-0.886) (-0.506) (-0.616) (-0.183) (-0.688) Ln (market value) 1.806*** 1.879*** 1.872*** 1.810*** 1.526*** (5.323) (5.112) (5.104) (5.074) (4.290) If CEO is chairman -0.119 -0.191 0.027 0.078 (-0.247) (-0.396) (0.059) (0.162) Board size -0.627 -0.584 -0.719 -0.102 (-0.707) (-0.660) (-0.856) (-0.117) Board independence -2.078 -1.773 -2.190 -3.766 (-0.683) (-0.584) (-0.752) (-1.321) IPO first-day return (firm) 0.166 0.097 0.230 -0.057 (0.538) (0.312) (0.799) (-0.183) IPO first-day return (market) -0.002 -0.001 -0.002 0.001 (-0.329) (-0.254) (-0.310) (0.163) Change in ROA 0.708 1.374 1.837 -2.422 (0.167) (0.332) (0.465) (-0.573) constant -37.226*** -36.398*** -36.295*** -34.920*** -29.937*** (-5.042) (-4.403) (-4.401) (-4.358) (-3.682) Adjusted R 2 0.147 0.122 0.126 0.143 0.277 F statistic 2.855 2.065 2.104 2.314 2.654 No. Obs. 173 169 169 175 169 35

IPOs as Lotteries: Expected Skewness and First-Day Returns