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Estimating Unobserved Complementarities between Entrepreneurs and Venture Capitalists (view source)
Revision as of 18:19, 22 August 2021
, 18:19, 22 August 2021no edit summary
|Has paper status=In development
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==Notes==
This section provides notes on the analysis in Selected_prelim.do. I ran the code and did a basic exploration of variables. These are the results:
* I couldn't make the sign on distance change. That's a real finding! I tried CA/MA fixed effects and interactions, Silicon Valley/Boston Cambridge fixed effects and interactions, using quadratic effects, various transformations... nothing undid the results. Also, log distance is the best variable.
* matchinstagebroad outperforms matchinstagenarrow in some contexts, we should use it.
* I tried logging all the vars, even t_pccitydollarsrankm1, to no avail.
* pcexitvaluem is already set to 0 when exit=0. It is missing for undisclosed value acquisitions. It's a great RHS variable: Log it and use it!
* I used mktid fixed effects and the results look pretty good without the interactions... but less good with them for the probit. There was a slight improvement for the reg, but only 2 vars are sig either way. I think maybe year ind is fine.
* Doing value conditional on exit gave just 1 *** and 1 *. It's the exit that drives the sig in exit value.
So, all in all, I say you're good to go with your 'best spec' if you want to keep the interactions:
probit pcexit l_matchbodist matchinstagebroad c.l_firmageatdeal##c.l_pcexpceopres c.l_matchprevportcos##c.t_pccitydollarsrankm1 i.year i.ind if realmatch==1, cluster(mktid)
However, '''the interactions are never significant'''. If you drop the weakest of the interactions (the one involving l_matchprevportcos*t_pccitydollarsrankm1), you're good to go for every variable except the remaining interaction, which is (almost) borderline (it's significant if your drop the industry fixed effects):
probit pcexit l_matchbodist matchinstagebroad c.l_firmageatdeal##c.l_pcexpceopres matchprevportcos t_pccitydollarsrankm1 i.year i.ind if realmatch==1, cluster(mktid)
Without interactions, the variables are all good:
probit pcexit l_matchbodist matchinstagebroad l_firmageatdeal l_pcexpceopres matchprevportcos t_pccitydollarsrankm1 i.mktid if realmatch==1, cluster(mktid)
A word on the interpretation of variables for the write-up:
* l_firmageatdeal is our VC wisdom variable
* matchprevportcos is our VC size variable
* l_pcexpceopres is our PC team quality variable
* t_pccitydollarsrankm1 is our PC environment quality variable
==Dataset Rebuild==
