earticle

영어

In this paper, we examine the impact of strategic investment choices of Korean initial public offering firms made at the time of going public on likelihood of post‐IPO failure. Our sample, identified from the KisValue, consists of non‐financial Korean IPOs issued during the period 1990‐2007. We conduct Cox Proportional Hazard models to assess the extent that variables associated with strategic investment choices of issuing firms influence the timing and occurrence of post‐issue failure. The Cox regression procedure is a combination of the hazard model and the maximum partial likelihood estimation procedure. The results from our survival analysis suggest that managerial commitment to capital expenditure enhances the ability of IPO issuing firms to remain viable for longer periods of time.