This paper has provided significant evidence of political connection as well as reputation and innovative efficiency showing how they impact the entrepreneurial firms’ Initial Public Offering (IPO) milestone in Taiwanese venture capital industry. Extant literatures have shown that political connections matter firm value; specifically, researchers have quantified the value of political connections for firms in prospects of long-run performance or financing strategies. Yet entrepreneurial milestone in the life of an entrepreneurial firm, that is to say the IPO, has less been empirically discussed.
This paper addresses the question how social capital in managerial resources matter the new entrepreneurial firms in Taiwan economy; and hence, tries to answer this question by examining the role of managers’ political connections in firms’ Initial Public Offering process. Using a sample of 390 domestic investment records in Taiwan, I find that political connections gradually play a significantly negative and economically meaningful role in the process of Initial Public Offering. Overall, this paper contribute to extant research by providing a better understanding of how firm managers’ political connections and educational connections are related to firm performance, especially in the IPO process. As a result, this paper tests levels of political connection and indicates that entrepreneurial firms with great political connections may get a higher likelihood in their IPO milestone; however, venture capitals with great political connections impact in a totally opposite way. Crony capitalism may provide a simple explanation to the quandary. Given the increasing importance of Crony capitalism this paper provides an evidence of the political connections and economic tradeoffs that have been made in venture capital industry.
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Appendix:
Colleges and Departments Integration Checklist
I. Colleges
Engineering Mechanical Engineering, Chemical Engineering, Material Sciences and Engineering, Civil Engineering, Transportation Engineering, Industrial Engineering, Engineering, Physics, Chemistry,
Mathematics, Statistics, Earth Sciences, Psychology, Sciences, Electronic Engineering, Computer Science and Information Engineering
Commerce Finance, Accounting, Commerce, EMBA, Business Administration Executive Program
Social Sciences Economics, Public Finance, Land Economics, Political Science, Social Sciences, Chinese Literature, Foreign Languages and Literatures, Literature
Law Law
Medicine Medicine, Pharmacy, Life Science, Agriculture, Genetics Other Mass Communication, Design, Architecture, Education, Honor
II. Departments Mechanical
Engineering
Machine, Chemical Mechatronics, Power Mechanical Engineering, Bio-Industrial Mechatronics, Aviation Mechanical Engineering, Naval Mechanical Engineer, Marine Engineering, Mechanical Engineering, Mechatronics, Industrial Technology, Energy and Refrigerating Air-Conditioning Engineering, Agricultural Engineering
Chemical Engineering
Chemical Engineering, Textile Engineering, Polymer Engineering, Industrial Chemistry, Biochemical Engineering
Material Sciences and Engineering
Material Sciences and Engineering, Mining and Metallurgical Engineering, Water Resource Engineering, Environmental
Engineering, Resource Engineering, Systems Science, Paper-Making and Printing, Nuclear Sciences, Metallurgy
Civil Engineering Civil Engineering, Civil and Construction Engineering Transportation
Engineering
Transportation Engineering, Aeronautics and Astronautics, Naval Architecture, Automobile, Vessel
Industrial Engineering
Industrial Engineering, Industrial Sciences, Industrial Management, Printing Engineering, Industrial and Systems Engineering, Industrial Technology, Industrial and Applied Engineering
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Engineering Only include Keyword “Engineering” without specifying departments
Physics Physics, Applied Physics, Astrophysics, Quantum Physics, Electrophysics, Applied Mechanics
Chemistry Chemistry, Applied Chemistry, Agricultural Chemistry, Organic Chemistry, Polymer Chemistry
Mathematics Mathematics, Applied Mathematics Statistics Statistics, Actuarial Science, Statistics
Earth Sciences Earth Sciences, Geography, Atmospheric Sciences, Ocean Sciences, Geosciences, Earth Physics, Atmospheric Physics
Psychology Psychology
Sciences Only include Keyword “Sciences” without specifying departments Electronic
Engineering
Electronic Engineering, Electrical Engineering, Communications Engineering, Photonics, Automation and Control, Nuclear
Engineering, Nuclear Engineering, Electrical Engineering and Computers, Energy Engineering
Computer Science and Information Engineering
Computer Science and Information Engineering, Information Management, Information Sciences, Computer Sciences, Computer Engineering, MIS, Computer, Operations Research, Computing and Control Sciences
Finance Finance, Finance, Financial Management, Money, Banking, Insurance, Risk Management, Real Estate Management
Accounting Accounting, Accounting and Statistics, Management Accounting Commerce Commerce, Business Administration, International Business,
International Trade, Business Management, Marketing, Industry and Business Management, Human Resource, Transportation
Management, Sport Management, Business Administration, Marketing, Managerial Philosophy, Operating and Management, Government Management, Management Sciences, Industrial Relations, Decision Sciences, Enterprise Innovative Development, Commerce Automation and Management, Technology Management Economics Economics, Economic Cooperation, Applied Economics,
International Economics, Agricultural Economics, Labor, Political Economics
Public Finance Public Finance, Public Finance and Taxation, Taxation Land Economics Land Economics, Land Resource
Political Sciences Political Sciences, Public Administration, Public Policy and Management, Urban Policy, Diplomacy, Three Principles of the
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People, National Development
Social Sciences Sociology, Social Work, Other unspecified Departments Chinese Literature Chinese Literature, Taiwanese Literature
Foreign Languages and Literatures
Foreign Languages and Literatures, Japanese, Any Foreign Languages
Literature Literature, History, Philosophy, Drama and Theatre, Library and Information Sciences
Medicine Medicine, Dentistry, Health Care Management, Public Health, Veterinary, Biomedical Sciences, Biomedical Engineering, Health Care Management, Laboratory Medicine
Pharmacy Pharmacy
Life Sciences Biology, Life Sciences, Biotechnology, Biochemical Technology, Food Sciences, Genetics，Any about Food or Biology, Biochemistry Agriculture Agriculture, Agronomy, Horticulture, Forestry, Agricultural
Management, Entomology, Agricultural Extension, Fishing Industry, Fishing, Plant Pathology, Fermentation Science
Law Law, Economic and Financial Law, Law, Justice, Comparative Law Mass
Communication
Mass Communication, Journalism, Advertising, Public Relations, Marketing and Advertising
Design Design, Industrial Design, Commercial Design, Visual
Communication Design, Multimedia Design, Fashion Design, Music, Art
Architecture Architecture, Urban Planning Education Any about Education
EMBA EMBA, Executive MBA，In-service student is excluded Business
Administration Executive Program
Business Administration Executive Program
Honor Degree Honor Degree
other Tourism, Home Economics, Other unspecified Departments
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