재무연구 제 권 호 (2016년 5월)
Asian Review of Financial Research, Vol., No..
pp.522~543
pp.522~543
The Effect of Government Hybrid Funds on IPO Underpricing : Evidence from Venture- Backed Initial Public Offerings in Korea
Hyunjoo Lee Korea University, South Korea
Jinho Jeong Korea University, South Korea
An IPO underpricing has been a subject of great interest from researchers. Previous studies have focused on the underpricing of private venture capital backed IPOs. There is a significant gap in the literature as underpricing in government-backed IPOs has been largely ignored by the mainstream academic research. We investigate how Korea Fund of Funds (KFoFs), which are government hybrid funds, influence the IPO underpricing. For this purpose, we analyze the price behavior of newly listed firms on KOSDAQ during the period of 2009 through 2014. Empirical evidence shows that KFoFs sponsorship reduces the degree of asymmetric information in IPO market. In addition, dual sponsorship of KFoFs and private VCs is found to have the most negative impact on the degree of IPO underpricing.
Hyunjoo Lee
Jinho Jeong
An IPO underpricing has been a subject of great interest from researchers. Previous studies have focused on the underpricing of private venture capital backed IPOs. There is a significant gap in the literature as underpricing in government-backed IPOs has been largely ignored by the mainstream academic research. We investigate how Korea Fund of Funds (KFoFs), which are government hybrid funds, influence the IPO underpricing. For this purpose, we analyze the price behavior of newly listed firms on KOSDAQ during the period of 2009 through 2014. Empirical evidence shows that KFoFs sponsorship reduces the degree of asymmetric information in IPO market. In addition, dual sponsorship of KFoFs and private VCs is found to have the most negative impact on the degree of IPO underpricing.
