• Asia-Pacific Journal of Business
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• v.14 no.3
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• pp.167-186
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• 2023

Purpose - The purpose of this study is to empirically investigate whether the auditor accreditation system for IPO firms improves the efficiency of the KOSDAQ IPO market. To verify the effectiveness of the auditor designation system, we time series compare four measures of IPO firms (earnings management, long-term stock performance, change in operating performance, and possibility of delisting). Design/methodology/approach - We test the hypothesis through event research method and regression analysis. Specifically, the dependent variables of the regression model are discretionary accruals in the year of IPO, 36-month holding period excess return after IPO, change in operating performance for 3 years after IPO, and dummy variable for delisting. And the explanatory variable is a dummy variable that separates the period before and after the implementation of the auditor designation system. Findings - We find that earnings management and delisting risks decreased more in the period after the implementation of the auditor accreditation system than in the previous period. In addition, we find that long-term stock performance and operating performance after IPO increase further after the implementation of the auditor accreditation system. Research implications or Originality - Overall, the results of this study suggest that the implementation of the auditor accreditation system for IPO firms contributes to improving market efficiency in the KOSDAQ market, where information asymmetry is high. Our study differs from previous studies in that it demonstrates the effectiveness of the auditor designation system using various measures.

• Asia-Pacific Journal of Business
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• v.13 no.1
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• pp.75-88
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• 2022

Purpose - This study investigates the effects of going public on the innovation of KOSDAQ firms. Design/methodology/approach - This study uses firms that go public from 2007 to 2011 in Korea. We compare a firm's innovation performance over five years before and after IPO. Findings - We find that firm's innovation declines after an IPO. After going public, both the quality and the quantity of patents are decreased. However, this decrease is alleviated in high-tech industries or concentrated industries where innovation is expected to be more valuable. When comparing firms with venture capital(VC), which are more likely to window dress, to firms without VC, VC backing has no meaningful impact on changes of innovation. Research implications or Originality - As the KOSDAQ market was established to provide small and medium enterprises(SMEs) with funds for firm's investments and growth, it is necessary to verify whether the capital raised at the IPO encourages innovation. Thus, our study contributes to the literature by examining empirically whether an IPO boosts a firm's innovation.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.121-156
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• 2010

Back-door-listing can be viewed both as M&A and an alternative to IPO. If IPO is an access to the capital market through regulations, back-door-listing would be the way of entering the market through trading. Back-door-listing can be a better choice considering the common wisdom that regulations hinder the functioning of free market system. One would, however, prefer IPO, for the informational asymmetry isless severe in case of IPO. This paper examines if IPO is superior to back-door-listing as to the informational efficiency. The excess buy-and-hold returns of the Kosdaq back-door-listing firms are estimated over the three-year-period since the event. They are compared against the excess buy-and-hold returns of the Kosdaq IPO firms over the same period of time. The results confirm this paper's prediction that IPO should be more information-efficient. Both IPO and back-door-listing firms start with high short-term excess returns and end up with long-term under-performance. However, back-door-listing firms show more significantly damaging long-term results. Furthermore, back-door-listing firms record poorer accounting results over the research period. These results imply that there exists fad at the time of both events and, in case of back-door-listing, this fad is reinforced by the possibility of window dressing.

• Management & Information Systems Review
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• v.29 no.1
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• pp.1-23
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• 2010

This study examines the impacts of outside directors' characteristics and compensation on stock performances of KOSDAQ and NASDAQ IPO firms. The results of this study indicated the following interesting results. First, there is no significant relation between outside directors' age and CARs on KOSDAQ firms. while significant positive relation between outside directors' age and CARs on NASDAQ firms. And the elder age group shows a more positive impact on performances compared with the younger age group. Second, there is no relation between outside directors' academic background and CARs for KOSDAQ firms. But We find a significantly positive one for NASDAQ firms. Third, In Relation to outside directors' careers, their professional or CEO careers group have more positive impact on stock performances than gray directors' careers group. Lastly, there is an insignificant negative relation between the outside directors' compensation and CARs for KOSDAQ firms. while there is a positive relative for NASDAQ firms. In particular, there is a significant positive relative between value of stock options and CARs for NASDAQ firms. from the result, I could find out the stock option for outside' directors have a positive influence on firm value.

• The Korean Journal of Financial Studies
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• v.8 no.1
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• pp.157-188
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• 2002

본 연구는 우리나라 IPO시장에서 나타나고 있는 초과수익률의 원인을 밝히고자 최근 벤처금융의 중심으로 급부상하고 있는 KOSDAQ시장의 공모 IPO를 대상으로 실증분석을 시도하였다. 연구결과 상장일 표본전체 IPO의 초과수익률(AR1)이 9.91%로 나타났으며, 벤처캐피탈투자 IPO는 5.13%, 비투자 IPO는 13.29%로 나타났다. 상한가의 행진이 종료된 날을 기준으로 한 표본전체 IPO의 초과수익률(AR2)은 30.97%, 벤처캐피탈 투자기업 IPO는 24.34%, 비투자기업 IPO는 34.67%로 나타났다. 초과수익률의 원인을 분석하기 위한 8개의 변수 중 IPO의 수요증감 척도인 KOSDAQ 지수는 초과수익률(AR)과는 양(+)의 관계로, 벤처캐피탈리스트들의 능력 및 가치책정의 행태를 엿볼 수 있는 변수인 본질가치와 공모가액의 차이는 음(-)의 관계로, 사업규모나 자본조달의 크기를 엿볼 수 있는 공모금액의 크기는 양(+)의 관계로 1% 유의수준에서 유의한 것으로 나타났다. 그러나 여타 변수들은 통계적으로 유의성을 확보하지는 못하였으나 초과수익률의 원인이론으로 '신호이론'과 '투기적 거품가설'에 의한 설명이 가능하였으며 분석결과를 다음과 같이 정리할 수 있었다. 첫째, IPO 본질가치에 대한 신뢰와 IPO의 발행규모에 대한 신뢰수준이 통계적으로 유의한 결과로 나타났는바 이러한 결과는 기업가치와 벤처 또는 사업의 계속적 수행 등에 대한 신호역할을 수행하고 있다고 할 수 있으며 상장초기 초과수익률은 주로 이러한 신호역할에 의한 수요집중으로 발생된 결과인 것으로 사료되었다. 둘째, 노련한 벤처캐피탈회사로 선정된 KTB의 투자기업들은 상장 후 4주간의 거래에 있어 AR 평균이 음(-)으로 여타 벤처캐피탈이 투자된 기업보다 손실 폭이 더욱 켰음에도 불구하고 상장일 초과수익률 AR2가 매우 높게 나타나 우리나라 IPO시장에 있어 과민반응(fads) 현상이 존재하고 있는 것으로 분석되었다. 셋째, 벤처캐피탈 투자 IPO의 초과수익률이 상대적으로 낮아 벤처캐피탈 투자여부가 IPO의 저가발행 수준을 축소하고 있어 벤처캐피탈리스트의 제 3자 보증역할이 어느 정도는 수행되고 있는 것으로 분석되었다.

• The Korean Journal of Financial Management
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• v.23 no.1
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• pp.135-163
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• 2006

Using a unique data set from a sample of 343 IPOs during the period from January 2001 to September 2003 in the KOSDAQ stock market, this paper investigates how a firm's pre-IPO relationship with a bank affects the firm's IPO underpricing phenomenon. Contrary to the findings by James and Wier (1990) using the U.S. data, we find no evidence that a pre-IPO banking relationship can help reduce IPO underpricing. On the other hand, we find that firms without pre-IPO banking and venture capitalist relationship have the smallest abnormal returns. Our results suggest that the KOSDAQ market participants positively perceive firms with pre-IPO banking and venture capitalist relationship as good quality firms and demand more issues when they go public. It also suggests that in the Korean IPO market, there has been over demand for issues of firms, which have had pre-IPO relationships with banks and venture capitalists.

• 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.

• The Journal of Small Business Innovation
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• v.19 no.4
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• pp.41-52
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• 2016

This paper examines the effect of unique underwriter lockup on the initial returns of an initial public offering (IPO) in the Korean Securities Dealers Automated Quotation (KOSDAQ). Underwriter lockup induces underwriters to underprice IPOs and stabilize aftermarket prices. The inducement is explored with respects to the mixtures of distributions of the initial returns consistent with underpricing and stabilization. Whether the inducement is meaningful when other factors are controlled is also explored. These explorations provide evidence that underwriter lockup leads to more positive average initial returns in the three aftermarket months.

• The Korean Journal of Financial Management
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• v.20 no.1
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• pp.233-260
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• 2003

This paper compares the underpricing of IPOs listed on KOSADQ with that of IPOs listed on KSE. When we consider the last day of upper price limit of IPOs, IPOs on KSE show higher initial excess return than IPOs on KOSDAQ. And AR2 which is the abnormal return based on the stock price of the last day recording upper limit after listing, IPOs on KOSDAQ exhibit larger abnormal return than IPOs on KSE. Our study also reports that the long-term performance of IPOs in two markets does not show any difference. That is, IPOs of both markets under performed in the long-run. The wealth relatives of IPOs are a little higher than market portfolio. We explored the reasons of the underpricing of IPOs in both markets through the multiple regression analysis. The business history is examined asstatistically significant variable to explain the underpricing.

• The Journal of the Korea Contents Association
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• v.18 no.3
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• pp.557-567
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• 2018

This paper studies the relationship between general investors' allotment ratio and underpricing for the companies that were newly listed in KOSDAQ market after the 20% rule, from March 2004 to December 2013, by empirical analysis. It is shown that the excess allotment ratio over 20% has a strong explanatory power for underpricing ratio under the 1% significance level. Furthermore, the general investors' allotment ratio is a significant explanatory variable of underpricing ratio under the 5% significance level. There are many hypotheses about underpricing, however, if underpricing is evident with high allocation ratio for general investors, it can be regarded as a signal of company's confidence in earnings after listing. In conclusion, this study reveals that general investors' allotment ratio can be used as a major explanatory variable that has a significant effect on the degree of undervaluation in the IPO market.