The Korean IPO Market: Initial Returns

Byung-Ju Kim, Richard J. Kish () and Geraldo M. Vasconcellos
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Byung-Ju Kim: Lehigh University, USA
Richard J. Kish: Lehigh University, USA
Geraldo M. Vasconcellos: Searing Professor of Finance and Economics, Rauch Business Center, Lehigh University, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2002, vol. 05, issue 02, 219-253

Abstract: Most Korean IPOs show significant initial underpricing which accounts for high initial returns. Our study explores the institutional and regulatory factors that have affected both the offering and after-market pricing mechanisms to test several hypotheses that might explain this underpricing in the Korean IPO market. We find a systematic difference in the initial stock price performance of new issues in an environment where firms have different motives for going public. We also find that in less regulated periods, the explanatory power of the variables relating to both the signaling and ex ante uncertainty hypotheses increase.

Keywords: IPO; Korea; Returns (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219091502000730

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