The Aftermarket Performance of Initial Public Offerings in Korea

University of Alberta School of Business Research Paper No. 2013-1063

Pacific-Basin Finance Journal Volume 3, Issue 4, December 1995, Pages 429–448

Posted: 2 Jul 2013

See all articles by Jason Lee

Jason Lee

University of Alberta

Jeong-Bon Kim

City University of Hong Kong

Itzhak Krinsky

Deutsche Bank Alex. Brown

Date Written: June 1, 1994

Abstract

In this paper, we empirically investigate Korean initial public offerings (IPOs) to provide one case of the international evidence on the long-run performance of IPOs. Our sample consists of 169 firms listed on the Korea Stock Exchange during the period 1985–1989. Unlike previous international evidence, our results reveal that the Korean IPOs outperform seasoned firms with similar characteristics. Much of the overperformance, however, takes place during the first month of seasoning and the long-run performance of Korean IPOs exclusive the first month of seasoning is not statistically different from that of seasoned firms. Our results also suggest that the existing theories on the long-run performance (Miller (1977) and Shiller (1990)) do not apply to the case of Korean IPOs. Finally, we find that the deregulation of June 1988 had a mixed impact on the aftermarket performance of Korean IPOs. It reduced the degree of initial underpricing but had no impact on IPOs' long-run performance.

Keywords: Korea, Initial public offerings, Long-run performance, Deregulation

JEL Classification: G12, G15

Suggested Citation

Lee, Jason and Kim, Jeong-Bon and Krinsky, Itzhak, The Aftermarket Performance of Initial Public Offerings in Korea (June 1, 1994). University of Alberta School of Business Research Paper No. 2013-1063, Pacific-Basin Finance Journal Volume 3, Issue 4, December 1995, Pages 429–448, Available at SSRN: https://ssrn.com/abstract=2281356

Jason Lee (Contact Author)

University of Alberta ( email )

Edmonton, Alberta T6G 2R6
Canada
780-492-4839 (Phone)
780-492-3325 (Fax)

Jeong-Bon Kim

City University of Hong Kong ( email )

Department of Accountancy
83 Tat Chee Avenue
Kowloon Tong
Hong Kong
852-3442-7909 (Phone)

Itzhak Krinsky

Deutsche Bank Alex. Brown

New York, NY
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
616
PlumX Metrics