Post-IPO Stock Valuation and Firm Age: Evidence from Korea

2 Pages Posted: 16 Feb 2015

See all articles by J.B. (Jong-Bom) Chay

J.B. (Jong-Bom) Chay

Sungkyunkwan University (SKKU)

Heuijung Kim

Sungkyunkwan University

Jungwon Suh

Sungkyunkwan University (SKKU)

Date Written: January 31, 2015


Using Korean stock market data, we find that firm age is a key determinant of firm value. Specifically, firm value measured by the market-to-book equity ratio has a downward sloping relation with firm age. We also find that profitability and capital expenditures decline as firms age, suggesting that firms may become less valuable with age as they become less profitable and run out of investment opportunities. Our evidence also suggests that firms conduct IPOs by taking advantage of a small window of opportunity for listing during which their profitability is temporarily at its peak.

Keywords: firm age; market-to-book; firm maturity; IPO window; learning hypothesis

JEL Classification: G10, G30

Suggested Citation

Chay, J.B. (Jong-Bom) and Kim, Heuijung and Suh, Jungwon, Post-IPO Stock Valuation and Firm Age: Evidence from Korea (January 31, 2015). Asian Finance Association (AsianFA) 2015 Conference Paper. Available at SSRN:

J.B. (Jong-Bom) Chay (Contact Author)

Sungkyunkwan University (SKKU) ( email )

SKK Business School
25-2 Sungkyunkwan-ro, Jongno-gu
Seoul, 03063
Korea, Republic of (South Korea)
+8210-8026-0484 (Phone)

Heuijung Kim

Sungkyunkwan University ( email )

53 Myeongnyun-dong 3-ga Jongno-ju
Seoul, 110-745

Jungwon Suh

Sungkyunkwan University (SKKU) ( email )

206 International Hall
Seoul 110-745, 110-745
Korea, Republic of (South Korea)

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