한국생산성학회

An Initial Public Offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. IPO is one of the most important events in the company's growth, since the company is growing to secure funding from outside through the case. Previous researches have explored the IPO performance of technological ventures, but the case of family business are not well addressed. Although there are many family enterprises controlled by founders or their relatives in domestic enterprises, nevertheless, research topics on family firms are also limited. However, the founders and families control most of firms in Korea, and thus, and thus it is necessary to examine the relationship between the change in ownership of family controlled firm and IPO performance. Based on agency theory we considered how the value of newly listed stock price of family firm is influenced by family ownership. Also taking into account of family business, we modeled the effects of family share and it's changes on short-term and long-term IPO performance. With 598 IPO data listed in KOSDAQ, current paper reports the followings. First, in terms of IPO underpricing in the initial stage of listing, family ownership cannot be seen as a factor influencing the IPO underpricing. This implies that IPO underpricing phenomenon occurred is not determined by family ownership but by other factors such as investor demand, favorable market conditions at the time of listing, and a system that protects investors from new listings. Second, the long-term IPO performance measured with CAR(cumulative excess return) and BHR(cumulative excess buy and holding return) returns over Fama-French four factors model(2010) is much higher for family controlled firm than those of non-family firm. Specifically, the long-term performance of a family firms that maintains sufficient control outperform that of a family company with weakened control or general firms. This means that public offerings issued by family firms, especially who maintain sufficient corporate control, can be a good long-term investment option. Based on those results, theoretical and practical implications were discussed in terms of productivity. Limitations of current study and future research directions were also described.