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Cumulative Returns from the Korean IPO Market

Author

Listed:
  • Byung-Ju Kim

    (Lehigh University, USA)

  • Richard J. Kish

    (Lehigh University, 621 Taylor Street, Bethlehem, PA 18015, USA)

  • Geraldo M. Vasconcellos

    (Lehigh University, USA)

Abstract

Korean and US IPO markets show significant initial underpricing, accounting for dramatic initial price increases. However, unlike its US counterpart, the Korean IPO market shows considerable market adjusted long-run returns. Hypotheses influenced by Korean institutional and regulatory factors, tested to explain the IPO cumulative returns, suggest that some of the theoretical arguments and empirical regularities observed in the US IPO market also apply to the Korean IPO market. However, this is a function of the regulatory environment in the four periods investigated in this study.

Suggested Citation

  • Byung-Ju Kim & Richard J. Kish & Geraldo M. Vasconcellos, 2004. "Cumulative Returns from the Korean IPO Market," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 43-75.
    • Handle: RePEc:wsi:rpbfmp:v:07:y:2004:i:01:n:s0219091504000020
    DOI: 10.1142/S0219091504000020
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    Citations

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    Cited by:

    1. Agathee, Ushad Subadar & Sannassee, Raja Vinesh & Brooks, Chris, 2012. "The underpricing of IPOs on the Stock Exchange of Mauritius," Research in International Business and Finance, Elsevier, vol. 26(2), pages 281-303.
    2. Hon-Wei Leow & Wee-Yeap Lau, 2018. "The Impact of Global Financial Crisis on IPO Underpricing in Malaysian Stock Market," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-17, December.
    3. Chen, Jun & Ke, Bin & Wu, Donghui & Yang, Zhifeng, 2018. "The consequences of shifting the IPO offer pricing power from securities regulators to market participants in weak institutional environments: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 349-370.
    4. Gili Yen & Ching-Lung Chen, 2009. "Partial auction, pricing information and price adjustment in the IPO's aftermarket: an empirical study of TAIEX-listing firms," Applied Financial Economics, Taylor & Francis Journals, vol. 19(8), pages 669-680.

    More about this item

    Keywords

    IPO; Korea; cumulative returns;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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