Using a sample of Korean firms, we show that the chaebol firms are motivated to
maintain control after their initial public offering. They do this by using a
greater
degree of underpricing to distribute new shares to small individual investors and
thereby avoid monitoring by large investors. On the other hand, independent
firms are motivated to seek outside block holders to benefit from their monitoring
activities. They use greater underpricing to distribute shares to these large
investors, thereby causing a positive relation between underpricing and outside
block holdings. Independent firms show a greater proportion of large investors,
which results in higher long-run returns after their IPOs than is found for chaebol
firms. These results are consistent with an agency cost perspective that
independent firms are motivated by the benefits of outside monitoring, whereas
chaebol firms are motivated by protecting their private benefits for firm control.
학회소식
공지사항
[2003년 제 2차] Monitoring or Control in the Case of Korean IPOs
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게시일 :
2003-07-12