IPO Firms Research Articles

코스피시장에서 신규 공모기업에 대한 벤처캐피탈의 인증효과

코스피시장에서 신규 공모기업에 대한 벤처캐피탈의 인증효과

Financial Information Asymmetry and Delisting of IPO Firms

본 연구는 2000년 1월부터 2011년 9월까지 국내 주식시장의 신규 상장기업을 대상으로 기업 공개과정에서 재무보고서의 정보 비대칭이 신규 상장기업의 생존확률에 미치는 영향을 살펴보았다. 재무보고서의 정보 비대칭은 이익조정에 따른 Jones(1991), Dechow et al.(1995), Kothari et al.(2005) 모형의 재량적 발생액을 이용하였다. 본 연구에 대한 실증 결과는 다음과 같다. 첫째, 상장폐지 기업은 생존 기업에 비해 설립일로부터 상장일 까지 소요 기간, 상장 후 생존기간이 상대적으로 짧았으며 수익성도 낮았다. 정보 비대칭의 수위도 상대적으로 높게 나타났으며 기업의 장단기 성과도 부진하였다. 둘째, Cox의 비례위험 모형(1972)을 통한 생존분석에서는 설립일로부터 상장일 까지 소요기간이 길고, 기업규모가 크면 상장폐지 확률은 감소하였다. 또한 핫 마켓에 신규 상장된 기업과 정보 비대칭의 수위가 높은 기업은 상장폐지 확률이 높았다. 셋째, 기업공개 이후 주가의 장단기 성과를 통제하였을 때 단기성과는 상장폐지와 유의적인 관계를 갖고 있지 않으나 60개월 간의 장기성과는 유의적인 음(-)의 관계를 갖고 있었다.We test for the association between information asymmetry for financial reports and delisting of IPO firms in Korea stock market over the period 2000 to 2011 by using discretional accrual measures as proxy for information asymmetry. By using Cox proportional hazard model, this research investigates whether low survival probability after going public is associated with higher information asymmetry in the IPO process. The results are as follows: First, delisted firms are more short-lived after going public and less profitable than survival firms. Second, survival probability after going public is significantly positively related to age and firm size. Firms that list in hot market and have larger information asymmetry in IPO process are more likely to delist. Third, survival probability of IPO firms isn’t significantly related to short run performance but significantly positively related to long run performance. Specifically, firms that have relatively better long-run performance have higher survival probability and lower hazard ratio as compared to firms that have worse long-run performance.

DOES POST-IPO M&A ACTIVITY AFFECT FIRMS’ PROFITABILITY AND SURVIVAL?

In this paper, we investigate the post-IPO operating performance of acquiring companies listed in the US in the period 1986–2008. We find that acquiring IPO firms delivers better operating returns when compared to non-acquiring IPO firms in the five years after the listing. This result holds controlling for both IPO and firm-specific characteristics. Furthermore, acquiring targets already listed on the stock exchange and running stock deals are associated with the improved operating performance. Finally, we find that acquisitions also affect the newly listed companies’ survival, reducing both the time to failure and the time to being acquired, which suggest a structural acceleration of the “natural” company lifecycle.

Investor attention and performance of IPO firms: Evidence from online searches

This paper examines whether abnormal investor attention has predictive power for IPO first day underpricing and long term underperformance. In particular, we employ the Baidu Index as the proxy for abnormal investor attention and find positive correlations between abnormal investor attention and IPO first day return, which indicates that a higher abnormal investor attention prior IPO would result in a higher IPO first day return. However, we find weak significant correlation between IPO long term underperformance and abnormal investor attention. We further investigate the interaction effect of IPO first day return and long term performance. The results show that IPO first day return has weak predictive power for long term underperformance.

Uncertainty of political subsidy, heterogeneous beliefs, and IPO anomalies

This paper focuses on financial subsidies introduced by the Chinese government to benefit IPO firms. Because of high uncertainty, subsidy information deepens the divergence of opinions regarding IPO firm value among investors, and the IPO issuers accordingly raise their offer prices. This paper finds that the divergence of analyst forecasts is greater and the offer prices are higher when issuers have received higher subsidies before listing. Moreover, the decrease in investors’ disagreement and market performance after listing is also serious. Compared to state-owned issuers, the influence of subsidy information on heterogeneous beliefs, offer prices, and long-run performance of non-state-owned issuers is higher. Overall, this paper extends the research regarding the pricing of political information by following heterogeneous beliefs theory. Moreover, this paper develops a new IPO pricing framework under heterogeneous beliefs.

The Day Ahead: IPO Today, Acquired Tomorrow?

<p><em>We study the double exit phenomenon—new IPO firms get acquired quickly in the M</em><em> </em><em>&</em><em> </em><em>A market. In this paper, we attempt to discern the distinct characteristics of new public firms that made them acquired soon after their IPOs. Specifically we find that double exit firms are those backed by venture capital. Double exit firms generally have prestigious investment banks underwrite their IPOs. High technology firms are more likely to be taken over soon after their IPOs. Also, double exit firms have higher level of intangible assets. We suggest that IPO may play an important role in firms’ following acquisition incidence. First, IPO helps to reduce ex ante transaction costs between firms and financial markets, such as raising external capitals. Second, IPOs wink signals concerning the quality of the firm.</em><em> </em></p>

When and why do IPO firms manage earnings?

There is significant disagreement about whether, when, and why IPO firms manage earnings. We precisely identify the timing and motives behind earnings management by IPO firms. The period around an IPO is characterized by two events: the IPO itself and the lockup expiration. Both the raising of capital at the IPO and the exit by pre-IPO shareholders at lockup expiration create incentives for firms to manage earnings. To disentangle the effect of these events, we examine quarterly, rather than annual, abnormal accruals. We find no evidence of income-increasing earnings management before the IPO. However, IPO firms exhibit positive abnormal accruals in the quarter before and the quarter of the lockup expiration. Positive abnormal accruals are concentrated in less scrutinized firms and firms with high selling by pre-IPO shareholders. Moreover, we find that these accruals subsequently reverse and that such reversals contribute to long-run IPO underperformance.

Same Bed Different Dream in IPO: The Analysis of IPO Withdraw Decision and Composition of IPO Shares

This paper examines that the object function of each insider of IPO firms differs by examining the relationship between the sources of secondary shares and withdrawal decision. Findings reveal that portion of secondary share sold by the venture capitalists is positively related to the withdrawal decision whereas that of CEOs is not related. When considering the market condition, the finding is pronounced in the worse market condition. We interpret it is caused by the difference in the object by the insiders: venture capitalists have a strong incentive to bring firm public in good market conditions, in order to maximize gains through IPO.

Beyond the Board Realm: Women in Senior Management and their Impact on IPO Capital Funding

AbstractThis study assesses the importance of female senior managers in Chinese IPO firms debuting in Hong Kong. I define senior management teams (SMTs) in relation to IPO prospectus disclosures. For the vast majority of firms, little to no overlap exists between SMT members and board personnel. Women are much better represented in SMTs than on boards. A central hypothesis is that Chinese firms' SMT members implement business strategy while board officers provide political connections. Unlike boards, female representation at SMT level strongly supports initial valuations. Findings suggest that women offer resource dependencies, add expertise and boost capital funding. In contrast to boards, underwriter quality is increasing in female representation at SMT level. Higher‐quality underwriters also gravitate towards SMTs with stronger academic bona fides. The present study also contributes by drawing connections and prescriptions with wider upper echelons, resource dependence and stakeholder theories. Overall, findings suggest that gender‐diverse SMTs play a major role in capital funding. More gender‐inclusive SMTs thus foster both social and business objectives.

KOSDAQ IPO firms’ advertising expenditures and stock returns

KOSDAQ IPO firms’ advertising expenditures and stock returns

KOSDAQ IPO firms’ advertising expenditures and stock returns

KOSDAQ IPO firms’ advertising expenditures and stock returns

코스닥 기업의 상장시점 과잉투자가 상장폐지위험에 미치는 영향

코스닥 기업의 상장시점 과잉투자가 상장폐지위험에 미치는 영향

Can Relationship Banking Reduce Firm's IPO Underpricing?

IPO underpricing harms pre-existing shareholders and reduces the capital firms can raise to fund their growth. This paper shows that relationship banking can reduce IPO underpricing by decreasing information uncertainty. I develop a theoretical model showing that good firms – those with a lower dispersion of market value – are harmed and bad firms benefit from IPO price uncertainty when there is no borrowing and, thus, no distinguishing information on firm quality. When investors receive signals about firm value only from publicly observable transaction lending, good firms benefit while bad firms suffer. However, when firms have access to loans through relationship banks and when such lending decisions are kept confidential, firms experience reduced IPO price uncertainty, which benefits both good and bad firms. I confirm this result empirically through difference-in-differences and reduced form instrumental variable regression designs. I use variation in the strength of the lending relationship between IPO firms and their underwriters generated by the repeal of the Glass-Steagall Act in 1999, which allowed commercial banks with close ties to their client firms to underwrite those firms’ equity issuances.

Corporate Culture and Venture Capital: Value Creation in Initial Public Offerings

This study documents corporate culture at the time of IPO and the relationship between corporate culture at the time of IPO and firms’ financial performance. Based on a sample of 1,355 US firms that went public between 1996 and 2011 and performance information to 2016, the data indicate strong evidence that regional culture, industry characteristics, and pre-IPO financing play key roles in explaining a firm’s cultural orientation. Moreover, the data indicate that IPO firms with a highly competition- and creation-oriented culture experience higher profitability and less risk of financial distress than other IPO firms.

Capital market liability of foreignness of IPO firms

This study contributes to the capital market liability of foreignness (CMLOF) literature. Utilizing the context of foreign IPO firms, we investigate how long CMLOF lasts, if CMLOF turns into capital market advantage of foreignness (CMAOF) over time, if the global financial crisis influences CMLOF, and how some firms mitigate CMLOF after IPO. Utilizing an explanatory sequential mixed methods design, we quantitatively analyze 549 foreign IPO firms and qualitatively analyze 1233 units of data and show quantitatively that CMLOF does diminish after one year and turns into CMAOF after 3 years for IPO firms and qualitatively reveal strategies to mitigate CMLOF.

Certification Effect of Venture Capital on KOSDAQ IPO Firms

Certification Effect of Venture Capital on KOSDAQ IPO Firms

Do Private Firms Benefit from Trading in the Private Securities Market?

The trading of private securities has recently gained greater visibility and importance with the advent of organized, private security exchanges. This paper uses data on IPO firms that list on the SharesPost private securities exchange platform to examine the potential benefits of a listing. Specifically, we test whether a listing reduces IPO underpricing or enables liquidity provision to firm employees. Controlling for endogeneity, we find no evidence that a pre-IPO listing on SharesPost lessens IPO underpricing. However, we also find that SharesPost-listed companies are able to pay their employees less in cash and more in stock and stock options than comparable non-SharesPost companies. Further, executive officers in SharesPost-listed IPO companies sell less shares during the IPO. These findings suggest that liquidity provision via the SharesPost platform significantly influences the form of compensation paid to employees before IPO and reduces the amount of capital raised in a funding event that must be allocated to meet employee needs.

A Two-Sided Matching Model of the Audit Market for IPO Firms

We estimate a two-sided matching model of IPO firms to auditors. Doing so allows us to separate the effects of sorting and influence in this audit market, and identify the effect that each has on observed audit quality. We find evidence that sorting on inherent quality of the client exists at the time auditors and clients match with each other. However, even after controlling for the effects of sorting, Big 4 auditors exert positive influence on audit quality; the probability of a restatement is significantly lower, all else equal, for clients of Big 4 auditors.

Impact of underwriter reputation on the accounting conservatism of the IPO firm: South Korean cases

We empirically examined whether underwriter reputation is associated with the level of accounting conservatism of IPO firms in South Korea. Financial institutions such as underwriters are motivated to maintain long-term business relationships with firms that appointed them as underwriters, and this relationship is considered more important to ensure a successful IPO process for IPO firms. However, only scant research exists that investigated the relationship between underwriter reputation and the level of accounting conservatism of an IPO firm. This research examined this relationship using both KOSPI and KOSDAQ markets in South Korea. We hypothesised that underwriter reputation is correlated with the level of accounting conservatism of an IPO firm. We examined our hypothesis using a sample of newly listed firms in the KOSPI and KOSDAQ markets from 2006 to 2014. The statistically significant result is that an underwriter with a good reputation indicates an IPO firm with higher accounting conservatism.

IFRS and IPO underpricing: evidence from Italy

This study examines the impact of the IFRS adoption on IPO underpricing; the latter is, as known, the positive spread between the first day of trading closing price and the offer price of a newly issued share. The underpricing phenomenon is usually associated with the information asymmetry among the actors involved in the process of listing. Some scholars suppose that IPO firms' usage of the IFRS, rather than the domestic GAAP, affects IPO underpricing through two mechanisms: 1) the quality; 2) the comparability of the financial reports. Our study is the first research that studies the impact of the IAS/IFRS on the IPOs underpricing in the Italian stock market. We find that the IFRS adoption is not associated with a decrease in IPO underpricing and that the trend of the financial market is the only factor associated with this phenomenon. Referring to the Italian stock market, our results suggest that the IFRS adoption does not reduce information asymmetries among investors, probably due to the lax of enforcement which seems to characterise the Italian environment.