earticle

영어

We investigate the characteristics of firms that choose between three different methods, IPOs, sellouts, or reverse takeovers to obtain exchange listings using Korean data over the period of 2000-2006. We first document that Korean firms, unlike U.S. firms, use reverse takeovers more frequently than IPOs to go public. We find that firm size, profitability, asymmetric information, and venture capital backing are important factors in determining the choice of the firms. Small and profitable firms tend to choose IPOs to go public, and they are subject to less information asymmetry. Large and unprofitable firms tend to choose sellouts and reverse takeovers to obtain public status. Compared to sellout firms, reverse takeover firms tend to be venture-capital backed and time stock markets. We also investigate the long-run stock return performance after these firms go public. Although all the firms underperform the market on average, the firms using reverse takeovers perform the worst.