• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.16 no.3
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• pp.145-158
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• 2021

The purpose of this study is to examine the influence of the ownership structure of unlisted firms on KOSDAQ listing. There are few studies analyzing the characteristics of listing success based on ownership structure. For startup executives, there is not enough data to refer to the ownership structure that can increase the possibility of listing. This paper examines the effects of ownership structure on IPO success through comparison between listed successful and failed companies among the companies in application for KOSDAQ listing eligibility review. The major findings are as follows; (1) Venture capital investment and shareholding have a statistically positive effect on the success of KOSDAQ listing. This results indicate that the venture capital's investment alleviate the problem of information asymmetry, and it is a valid signal for market participants. The result means the role of venture capital seems to be important when companies are listed on the KOSDAQ. (2) The largest shareholder's stake has an inverted-U shape relationship with listing success. In other words, the ownership concentration mitigates moral hazard problem, which leads to listing success. However, if the ownership concentration exceeds a certain level, the chances of success in listing will decrease due to concerns over the pursuit of private interests. The result suggests that the largest shareholder's stake reduce agency problem. This study academically contributes to the existing literature by demonstrating the ownership structure affects IPOs, and explaining the results based on agent theory and signal theory. Our results provide practical implications for companies preparing for an IPO on the KOSDAQ.

• 산업혁신연구
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• v.36 no.1
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• pp.133-163
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• 2020

This study is designed to see whether overpriced IPO is caused from firm's earnings management, and how effects this to IPO firm's long-term performance. To examine addressed above, we take a look into how firm's earning quality listing on Korea Exchange in 2007 through 2016 is related with long-term stock performance post IPO. Especially, we measure how associated the disparate ratio between offer price and fair price with earnings quality and long-term performance. To examine these three factors, 'three-step mediated regression analysis method' is used. Earnings quality's calculated by discretionary accruals. Disparate ratio is calculated with offer price and estimating share price's rate measured by applying relative valuation model. To sum up, it is as follows. At first, as earnings quality gets high, the disparate ratio between offer price and fair price gets reduced. Secondly, as earnings quality gets high, firm's long term stock performance follows high. At last, as the disparate ratio between offer price and fair price gets increased, firm's long-term stock performance gets decreased. Moreover, mediation effect of the disparate ratio between offer price and fair price is partially found. Thus, it addresses that raised earnings revision before listing is resulted in overpricing of the IPO, and it also leads to poor long term stock performance. This study contributes that empirical analysis is applied to examine long-term under performance using disparate ratio between offer price and fair price. Moreover, this is useful not only to alert investors to risky investing pattern, but to provide informative reference to financial institutions in making policies or decisions about IPO.

• Management & Information Systems Review
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• v.36 no.4
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• pp.117-127
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• 2017

In recent times the size of the world IPO in general has skyrocketed. Specifically, China's financial market development is becoming important as both the size of China's capital market and the number of companies going public are gradually increasing. This has led to a rapid development of venture vapital(VC) institutions in China for the past couple of decades. This study focuses on one of the three markets of China's Shenzhen Stock Exchange-the Growth Enterprise Board((GEB) hereafter, ChiNext). The ChiNext is established in October, 2009 to enable hi-tech or high growth potential technology companies that find it relatively difficult to fulfil the listing requirements of either the Shenzhen Main Board or Small and Medium Size Enterprise Board(SMEB) to go public. This study covers a three-year period(2012/01/-2015/01) and analyze first day initial return of 83 venture capital-backed companies and 53 non-venture capital-backed companies using T-test. Regression analysis is used as to examine the variables affecting IPO's first-day return. The empirical results are four-fold. First, the level of first day return of venture-backed is significantly lower than non venture capital backed support in the Chinese venture capital market. Second, the level of first-day return of listed companies supported by foreign venture capital is significantly higher than that of companies receiving domestic venture capital support. Third, the firms that have a large number of venture capital firms showed a low level of first-day return. Fourth, regression result for the IPO first-day return which is as dependent variable indicates that the venture capital support(VCAP), number of venture capital(VCNum), offering size(Lnsize) and PER all affect have negative effect on the first day initial return. Also, the venture capital type(VCType), turnover ratio and the the firm type(Tech-firms) statistically affect IPO first day return positively. Finally, by shedding more light on the IPO first-day return, this paper provides meaningful information to investors about the Chinese IPO market.

• KDI Journal of Economic Policy
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• v.12 no.2
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• pp.95-120
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• 1990

The underpricing of new shares of a firm that are offered to the public for the first time (initial offerings) is well known and has puzzled financial economists for a long time since it seems at odds with the optimal behavior of the owners of issuing firms. Past attempts by financial economists to explain this phenomenon have not been successful in the sense that the explanations given by them are either inconsistent with the equilibrium theory or implausible. Approaches by such authors as Welch or Allen and Faulhaber are no exceptions. In this paper, we develop a signalling model of capital investment to explain the underpricing phenomenon and also analyze the efficiency of investment. The model focuses on the information asymmetry between the owners of issuing firms and general investors. We consider a firm that has been owned and operated by a single owner and that has a profitable project but has no capital to develop it. The profit from the project depends on the capital invested in the project as well as a profitability parameter. The model also assumes that the financial market is represented by a single investor who maximizes the expected wealth. The owner has superior information as to the value of the firm to investors in the sense that it knows the true value of the parameter while investors have only a probability distribution about the parameter. The owner offers the representative investor a fraction of the ownership of the firm in return for a certain amount of investment in the firm. This offer condition is equivalent to the usual offer condition consisting of the number of issues to sell and the unit price of a share. Thus, the model is a signalling game. Using Kreps' criterion as the solution concept, we obtained an essentially unique separating equilibrium offer condition. Analysis of this separating equilibrium shows that the owner of the firm with high profitability chooses an offer condition that raises an amount of capital that is short of the amount that maximizes the potential profit from the project. It also reveals that the fraction of the ownership of the firm that the representative investor receives from the owner of the highly profitable firm in return for its investment has a value that exceeds the investment. In other words, the initial offering in the model is underpriced when the profitability of the firm is high. The source of underpricing and underinvestment is the signalling activity by the owner of the highly profitable firm who attempts to convince investors that his firm has a highly profitable project by choosing an offer condition that cannot be imitated by the owner of a firm with low profitability. Thus, we obtained two main results. First, underpricing is a result of a signalling activity by the owner of a firm with high profitability when there exists information asymmetry between the owner of the issuing firm and investors. Second, such information asymmetry also leads to underinvestment in a highly profitable project. Those results clearly show the underpricing entails underinvestment and that information asymmetry leads to a social cost as well as a private cost. The above results are quite general in the sense that they are based upon a neoclassical profit function and full rationality of economic agents. We believe that the results of this paper can be used as a basis for further research on the capital investment process. For instance, one can view the results of this paper as a subgame equilibrium in a larger game in which a firm chooses among diverse ways to raise capital. In addition, the method used in this paper can be used in analyzing a wide range of problems arising from information asymmetry that the Korean financial market faces.

• Asia pacific journal of information systems
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• v.21 no.3
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• pp.71-96
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• 2011

Within the traditional medical delivery system, patients residing in medically vulnerable areas, those with body movement difficulties, and nursing facility residents have had limited access to good healthcare services. However, Information and Communication Technology (ICT) provides us with a convenient and useful means of overcoming distance and time constraints. ICT is integrated with biomedical science and technology in a way that offers a new high-quality medical service. As a result, rapid technological advancement is expected to play a pivotal role bringing about innovation in a wide range of medical service areas, such as medical management, testing, diagnosis, and treatment; offering new and improved healthcare services; and effecting dramatic changes in current medical services. The increase in aging population and chronic diseases has caused an increase in medical expenses. In response to the increasing demand for efficient healthcare services, a telehealth service based on ICT is being emphasized on a global level. Telehealth services have been implemented especially in pilot projects and system development and technological research. With the service about to be implemented in earnest, it is necessary to study its overall acceptance by consumers, which is expected to contribute to the development and activation of a variety of services. In this sense, the study aims at positively examining the structural relationship among the acceptance factors for telehealth services based on the Technology Acceptance Model (TAM). Data were collected by showing audiovisual material on telehealth services to online panels and requesting them to respond to a structured questionnaire sheet, which is known as the information acceleration method. Among the 1,165 adult respondents, 608 valid samples were finally chosen, while the remaining were excluded because of incomplete answers or allotted time overrun. In order to test the reliability and validity of the assessment scale items, we carried out reliability and factor analyses, and in order to explore the causal relation among potential variables, we conducted a structural equation modeling analysis using AMOS 7.0 and SPSS 17.0. The research outcomes are as follows. First, service quality, innovativeness of medical technology, and social influence were shown to affect perceived ease of use and perceived usefulness of the telehealth service, which was statistically significant, and the two factors had a positive impact on willingness to accept the telehealth service. In addition, social influence had a direct, significant effect on intention to use, which is paralleled by the TAM used in previous research on technology acceptance. This shows that the research model proposed in the study effectively explains the acceptance of the telehealth service. Second, the research model reveals that information privacy concerns had a insignificant impact on perceived ease of use of the telehealth service. From this, it can be gathered that the concerns over information protection and security are reduced further due to advancements in information technology compared to the initial period in the information technology industry, and thus the improvement in quality of medical services appeared to ensure that information privacy concerns did not act as a prohibiting factor in the acceptance of the telehealth service. Thus, if other factors have an enormous impact on ease of use and usefulness, concerns over these results in the initial period of technology acceptance may become irrelevant. However, it is clear that users' information privacy concerns, as other studies have revealed, is a major factor affecting technology acceptance. Thus, caution must be exercised while interpreting the result, and further study is required on the issue. Numerous information technologies with outstanding performance and innovativeness often attract few consumers. A revised bill for those urgently in need of telehealth services is about to be approved in the national assembly. As telemedicine is implemented between doctors and patients, a wide range of systems that will improve the quality of healthcare services will be designed. In this sense, the study on the consumer acceptance of telehealth services is meaningful and offers strong academic evidence. Based on the implications, it can be expected to contribute to the activation of telehealth services. Further study is needed to assess the acceptance factors for telehealth services, such as motivation to remain healthy, health care involvement, knowledge on health, and control of health-related behavior, in order to develop unique services according to the categorization of customers based on health factors. In addition, further study may focus on various theoretical cognitive behavior models other than the TAM, such as the health belief model.

• Journal of Intelligence and Information Systems
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• v.22 no.1
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• pp.119-138
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• 2016

Since the Industrial Revolution, which made the mass production and mass distribution of standardized goods possible, machine-made (manufactured) products have accounted for the majority of the market. However, in recent years, the phenomenon of purchasing even more expensive handmade products has become a noticeable trend as consumers have started to acknowledge the value of handmade products, such as the craftsman's commitment, belief in their quality and scarcity, and the sense of self-esteem from having them,. Consumer interest in these handmade products has shown explosive growth and has been coupled with the recent development of three-dimensional (3D) printing technologies. Etsy.com is the world's largest online handmade platform. It is no different from any other online platform; it provides an online market where buyers and sellers virtually meet to share information and transact business. However, Etsy.com is different in that shops within this platform only deal with handmade products in a variety of categories, ranging from jewelry to toys. Since its establishment in 2005, despite being limited to handmade products, Etsy.com has enjoyed rapid growth in membership, transaction volume, and revenue. Most recently in April 2015, it raised funds through an initial public offering (IPO) of more than 1.8 billion USD, which demonstrates the huge potential of online handmade platforms. After the success of Etsy.com, various types of online handmade platforms such as Handmade at Amazon, ArtFire, DaWanda, and Craft is ART have emerged and are now competing with each other, at the same time, which has increased the size of the market. According to Deloitte's 2015 holiday survey on which types of gifts the respondents plan to buy during the holiday season, about 16% of U.S. consumers chose "homemade or craft items (e.g., Etsy purchase)," which was the same rate as those for the computer game and shoes categories. This indicates that consumer interests in online handmade platforms will continue to rise in the future. However, this high interest in the market for handmade products and their platforms has not yet led to academic research. Most extant studies have only focused on machine-made products and intelligent services for them. This indicates a lack of studies on handmade products and their intelligent services on virtual platforms. Therefore, this study used signaling theory and prior research on the effects of sellers' characteristics on their performance (e.g., total sales and price premiums) in the buyer-seller relationship to identify the key influencing e-Image factors (e.g., reputation, size, information sharing, and length of relationship). Then, their impacts on the performance of shops within the online handmade platform were empirically examined; the dataset was collected from Etsy.com through the application of web harvesting technology. The results from the structural equation modeling revealed that the reputation, size, and information sharing have significant effects on the total sales, while the reputation and length of relationship influence price premiums. This study extended the online platform research into online handmade platform research by identifying key influencing e-Image factors on within-platform shop's total sales and price premiums based on signaling theory and then performed a statistical investigation. These findings are expected to be a stepping stone for future studies on intelligent online handmade services as well as handmade products themselves. Furthermore, the findings of the study provide online handmade platform operators with practical guidelines on how to implement intelligent online handmade services. They should also help shop managers build their marketing strategies in a more specific and effective manner by suggesting key influencing e-Image factors. The results of this study should contribute to the vitalization of intelligent online handmade services by providing clues on how to maximize within-platform shops' total sales and price premiums.

• Journal of Technology Innovation
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• v.24 no.1
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• pp.143-167
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• 2016

The purpose of this study is to analyze changes of innovation activities and their performance in pre-IPO and post-IPO of KOSDAQ IPO listed companies in medical and pharmaceutical fields, which require high R&D investment, from 2000 to 2005 in Korea. The innovation efficiencies of the IPO companies were measured before and after three years based on the DEA model. The financial data and patent information of the listed company during total 6 years, which were 3 years before IPO and 3 years after IPO, were collected. The main results of this research are as follows. First, it took an average 12.86 years until IPO in the start-up of the IPO companies in the pharmaceutical sector, and innovation was on average more active than the IPO before. R&D investment was higher than the IPO before, and the number of the applied patent during 3 years after IPO was 16.67 which was increased from 8.43 during 3 years before IPO. In addition, the average scope of technology of the IPO companies was expanded from 11 to 22 technology fields during previous 3 year and after 3 year each, and financial growth after IPO was lower than the previous IPO. Second, the financial performance of R&D investment and the performance of patent activity were weakened in the efficiency after the IPO, and the integrated performance from the patenting activities and the R&D investment was decreased after the IPO. Finally, the efficiency of the financial performance of the patenting activity was lower than the efficiency of the financial performance of the patent and R&D investment and patent activities under the R&D investment. In particular, the inefficiency of the firms' patenting activities performance after the IPO was caused by the decreasing return to scale, according to the results of this study. This results implicate that the expansion of R&D investments through the IPO had not lead to the financial performance of the market, and that the overall inefficiency since the IPO is due to the inefficiencies at the stage for the outcome of innovation activity rather than the output obtained through the R&D investments that appear to lead the performance of the market.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.17 no.2
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• pp.33-51
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• 2022

This study analyzes newly listed companies on KOSDAQ from 2011 to 2020 for both firms having experience in attracting venture investment before listing (VI) and those without having experience in attracting venture investment (NVI) by examining differences between two groups (VI and NVI) with respect to both the level of listing performance and that of firm performance (growth) after the listing. This paper conducts descriptive statistics, mean difference, and multiple regression analysis. Independent variables for regression models include VC investment, firm age at the time of listing, firm type, firm location, firm size, the age of VC, the level of expertise of VC, and the level of fitness of VC with investment company. Throughout this paper, results suggest that listing performance and post-listed growth are better for VI than NVI. VC investment shows a negative effect on the listing period and a positive effect on the sales growth rate. Also, the amount of VC investment has negative effects on the listing period and positive effects on the market capitalization at the time of IPO and on sales growth among growth indicators. Our evidence also implies a significantly positive effect on growth after listing for firms which belong to R&D specialized industries. In addition, it is statistically significant for several years that the firm age has a positive effect on the market capitalization growth rate. This shows that market seems to put the utmost importance on a long-term stability of management capability. Finally, among the VC characteristics such as the age of VC, the level of expertise of VC, and the level of fitness of VC with investment company, we point out that a higher market capitalization tends to be observed at the time of IPO when the level of expertise of anchor VC is high. Our paper differs from prior research in that we reexamine the venture ecosystem under the outbreak of coronavirus disease 2019 which stimulates the degradation of the business environment. In addition, we introduce more effective variables such as VC investment amount when examining the effect of firm type. It enables us to indirectly evaluate the validity of technology exception policy. Although our findings suggest that related policies such as the technology special listing system or the injection of funds into the venture ecosystem are still helpful, those related systems should be updated in a more timely fashion in order to support growth power of firms due to the rapid technological development. Furthermore, industry specialization is essential to achieve regional development, and the growth of the recovery market is also urgent.