• Journal of the Korea Academia-Industrial cooperation Society
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• v.13 no.5
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• pp.2096-2109
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• 2012

This study investigates empirical issues that have received little attention in the previous research in the Korean capital market. It is to find any financial determinants on the capital structure for the firms listed in the KOSDAQ(Korea Securities Dealers Automated Quotation). Another test is performed to find any possible discriminating factors by utilizing a robust methodology, which may distinguish between the firms belonging the 'prime section' and the 'venture section' in terms of their financial aspects. Moreover, the null hypothesis that the changing trend or movement of a firm's capital structure with respect to its industry mean (or median) may be random, is also tested. For the book-value based debt ratios, size(INSIZE), growth(GROWTH), Market to book value of equity(MVBV), volatility(VOLATILITY), market value of equity (MVE) and section dummy (SECTION) showed their statistically significant effects on the book-value based leverage ratios, respectively, while size(INSIZE), growth(GROWTH), market value of equity(MVE), beta(BETA) and section dummy (SECTION) showed their statistically significant effects on the market-value based leverage ratios. This study also found an interesting result that a firm belonging to each corresponding industry has a tendency for reversion toward its mean and median leverage ratios over the five-year tested period.

• The Korean Journal of Financial Management
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• v.24 no.1
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• pp.109-147
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• 2007

According to the perspective of capital structure theory, we analyzed the dynamism of the capital structure determinants by using panel data of 244 KOSDAQ firms based on two-step GMM system methodology suggested by Blundell Bond(1998). This dynamic methodology had not been used to analyse capital structure determinants in Korea. In the dynamic model of capital structure, profit had negative effect on the book leverage and market leverage, which meant supporting pecking order theory. Growth opportunity (MBR) affected negatively to the market leverage. For the determinants of leverage, earnings volatility had significantly positive effect on KOSDAQ 50 firms. KOSDAQ and KOSDAQ 50 firms had the target leverage. The adjustment speed in KOSDAQ firms was 0.4958 on the book leverage, it was faster than in KOSDAQ 50 firm's 0.2863 on the book leverage and the adjustment speeds for the market leverage were 0.7651 for KOSDAQ firms and 0.5643 for KOSDAQ 50 firms. There was difference in adjustment cost between KOSDAQ firms and KOSDAQ 50 firms.

• Journal of Industrial Convergence
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• v.7 no.1
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• pp.63-82
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• 2009

Many The purpose of this paper is to revisit the existence of monthly effect in the Korea Stock Market. We conducted additory test about KOSPI200 from January 1990 to December 2002 and about KOSDAQ from January 2002 to December 2006. The other main focus is examine Size Effect in Korean Stock Market. We also indicate Information hypothesis throught our findig. Data used in this paper are monthly returns of KOSPI and KOSDAQ from 1980 to 2006. As a result, Evidence is provided that monthly abnormal returns in January have large means relative to the remaining eleven months. The relation between abnormal returns and size is always negative and more pronounced in January than in any other month-even in years. More than fifty percent of the January premium is attributable to large abnormal returns during the first week of trading in the year particularly on the first trading day. This finding is highly significant in the mall sized capital stock of KOSPI market. We found January effect and Size Effect in the KOSPI market, but we didn't find January effect and Size Effect in the KOSDAQ market and KOSPI200.

• 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.

• Management & Information Systems Review
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• v.34 no.3
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• pp.125-140
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• 2015

KOSDAQ market reorganized their division system from two types to four types of division departments such as blue chip, venture, medium, and technology development departments in 2011. However, under the current new division system, financially unhealthy firms attempting to take advantage of the classifying opportunity of blue chip department are likely to engage in pernicious earnings management. The objective of this study is to investigate the earnings management behavior surrounding the time of KOSDAQ firms entering the blue chip department via new division system. More specifically, we test whether the firms classified blue chip department tend to engage in upward earnings management using accruals and real activities before and after they achieve blue chip status. In this study, we analyzed 111 firms classified blue chip department in 2011 according to new division system in KOSDAQ market. Major test results indicate that firms entering the blue chip department according to current KOSDAQ division system in general, tend to inflate reported earnings by means both of accruals and real activities right before the entering year. This result suggests that the firms classified blue chip department engage in opportunistic earnings management with a view to uplifting their market values. Our study is expected to provide clues useful for searching policy directions which intend to ameliorate adverse side effects of the current KOSDAQ division system. In sum, the regulatory authorities and enforcement bodies need to exercise caution in deliberating more stringent review procedures so that financially healthy and promising candidates are properly segregated from their poor and risky counterparts, thus enhancing the beneficial effects, while mitigating adverse side effects of the system.

• The Korean Journal of Financial Management
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• v.26 no.1
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• pp.127-163
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• 2009

This paper examines the results of survey that the foreign ownership is cointegrated with capital market conditions in Korea using Vector Error Correction Model (VECM) and how the mechanism of innovations and dynamics among the foreign ownership and capital market proxies in the VECM was described. Specifically, we find that the foreign ownership and capital market proxies follow I (1) process and there are cointegrated relations between the foreign ownership and capital market proxies. Adopting the impulse response function and variance decomposition in the VECM, we suggest, in turn, the default risk premia, liquidity of market and the rate of interest in long term business cycle take on a special function on the KSE and KOSDAQ. Finally, we also offer evidences of which there are differences of the mechanism of dynamics and innovations between on the KSE and on the KOSDAQ.

• Asian Journal of Innovation and Policy
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• v.3 no.2
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• pp.172-192
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• 2014

This study aims to analyze the valuation of technology firms in the stock market to answer how before-market entities should be valuated. This study analyzes 230 market reports of 2012 for technology firms in the KOSDAQ under several hypotheses. The results are as follows: 90% used the 3 multiples methods consisting of PER multiples with 80%, PBR multiples 8.7% and EBITDA multiples 1.7%. The average of PER multiples was 15 with the range of 6.9 to 83. That of PBR multiples is 2.27. Forecasting for cash flow is not applied over 4 years, but mainly 2-3 years. The accuracy of forecasting was 18.8%, 34.4% and 8% according to the different definitions. No differences were found in the accuracy of forecasting between valuation methods, between the industries having more intangible assets and the industries having less, and between startups and general companies and between ages and listed ages.

• Journal of Convergence for Information Technology
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• v.10 no.11
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• pp.302-312
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• 2020

This study examined whether there is a difference in cost asymmetry between a corporate listed on KOSDAQ and a corporate listed on KOSPI, and whether there is a difference in cost asymmetry depending on the size of the listed corporate. In the previous study, cost asymmetry was examined only for listed corporate, but the difference in size between KOSDAQ-listed corporate and KOSPI-listed corporate was not examined. However, according to many studies, since the characteristics of corporate and firm risks are different between corporate listed on KOSPI and corporate listed on KOSDAQ, or even for listed corporate, such an impact may affect the decision-making of internal resource allocation. The analysis was conducted that there would be a difference in the impact. For this study, the results of analyzing the KOSPI and KOSDAQ markets from 2011 to 2019 using the cost behavior model of Anderson et al. (2003), There was a difference in cost behavior in the KOSPI and KOSDAQ markets. Overall, as in previous studies, Cost Stickiness was appeared. but in the case of the KOSPI market, Cost Stickiness was mitigated.It was found that corporate with large corporate size made the decision to dispose of idle resources more clearly when sales decreased. In addition, it was observed that the higher the foreign investor's ownership ratio, the KOSPI market, and the larger the corporate size, the more clearly the Stickiness of cost was mitigated. This study expands research on cost asymmetry and reveals that there is a difference between the KOSPI market and the KOSDAQ market, and between the size of the corporate, and has a differentiation from previous studies.

• Asia-Pacific Journal of Business
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• v.11 no.4
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• pp.205-224
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• 2020

Purpose - This study aimed to identify the effects of ownership structures on agency costs in internationally diversified firms listed on the KOSDAQ market. Design/methodology/approach - A total of 5,824 samples were finally selected and empirically analyzed for a total of nine years from 2011 to 2019, during which the International Accounting Standards had been mandatory for firms listed on the KOSDAQ market. Findings - The results of this study showed that the effects of ownership structures on the ratio of asset turnover are positive for the major share and foreign equity ratios of international diversified firms. Moreover, by selecting the ratio of entertainment expenses as a proxy for agency expenses, this study confirmed that the effects of the ownership structure of an international diversified entity on entertainment expenditure were determined to show a significantly negative relation to entertainment expenditure, thus indicating that the higher the ratio of major shareholders, the more appropriately control the expenditure of entertainment expenses through arbitrary private deviations of the management.Furthermore, considering the effect of the ownership structure on the expenditure of sales and administrative expenses as a proxy variable for agency costs, this study verified that the majority share ratio of international diversified firms was negative to the expenditure of sales and administrative expenses, confirming that the higher the share of major shareholders, the lower the selling and administrative costs, but insignificant.Finally, as a result of determining whether the ownership structure of an international diversified firm affects the holding of free cash, the majority share of this firm shows a significantly negative relation to the ratio of the holding of surplus cash, indicating that the higher the proportion of major shareholders, the more appropriately control the holding of the entity's free cash through arbitrary private deviance by the manager. Research implications or Originality - Major shareholders of an internationally diversified firm listed on the KOSDAQ market play a positive role in the firm's performance by properly controlling agency costs that may be incurred by the management.

• Knowledge Management Research
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• v.5 no.1
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• pp.39-56
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• 2004

Mergers and Acquisitions(M&A) have long played an important role in the growth of firm. M&A has been considered a effective strategy for Korean government to restructure industry. Previous studies provided mixed results on the synergy effect of M&A This study provides investigation on 39 mergers occurred over the sample period from 2000 to 2001. In this study, event study methodology arc used to calculate abnormal return(AR) and cumulative abnormal return(CAR) based on mean-adjusted model. The testing period of this study from date -30 through date +30, where date zero is the date of the first public announcement of the merger. The empirical results in this study can be summarized as follows. First, the return rates of KOSDAQ registered firms with M&A appears higher than that of KSE listed firms. This means that public announcement of M&A is more influential on stock price for KOSDAQ registered firms than KSE listed firms. Second, The difference between actual merging price and fair value is significant in KSE listed firms and KOSDAQ registered firms. This means that the investors take M&A of KOSDAQ registered firms as a good news. Third, the impact on the market prices of merging firms take place after the first public announcement of the merger in KSE registered firms. But the impact on the market prices take place not only merging firms but also merged firms in KOSDAQ registered firms. This result shows that the investors recognize a M&A is a strategy of technology transfer in small & venture business.