IPO 공모주 균등배정방식으로의 전환효과분석

Kyu-Sung Lee ; Hyunchul Chung

Hanyang University, Mirae Asset Securities 1401ho@hanyang.ac.kr
(Corresponding Author) Hanyang University hcchung@hanyang.ac.kr

Analysis of the Transition Effect to an Equal Allocation Method in IPO Shares

Copyright 2023 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study investigates the impact of introducing the equal allocation method(EAM) for public offering stocks on individual investor participation and stock prices. The study aimed to determine whether the EAM expanded individual investor involvement and how it affected stock prices compared to the previous proportional allocation method. The introduction of the EAM increased the number of shareholders participating in public offerings. This increase in participation could either enhance the efficiency of stock prices by attracting more informed investors or exacerbate speculative trading, leading to higher market excess returns. To assess the effects, the study employed event study and Cahart four-factor analysis to measure excess returns before and after the EAM. The findings indicate a decrease in cumulative excess returns of public offering stocks after the introduction of the EAM. The study also found that the excess return (alpha value) of public offering stocks decreased after the introduction of the EAM, suggesting improved stock price efficiency. Overall, the study highlights the importance of increasing market participation through the EAM and enhancing the efficiency of public offering stock prices. It provides valuable insights into the impact of system improvements related to the introduction of the EAM.

Keywords:

IPO, Equal Allocation Method(EAM) for stock offering, Market Efficiency, Event Study

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∙ The author Kyu-Sung Lee is a Ph.D. Candidate in Finance at Hanyang University, with a Master's from the same institution. He has worked at the National Pension Service Research Institute, Korea Insurance Research Institute, and Korea Institute of Finance. Currently, he's a researcher at MiraeAsset Securities, focusing on pensions, asset allocation, and retirement withdrawal strategies.

∙ The author Hyunchul Chung is currently a professor of finance at School of Business, Hanyang University. He received his Ph.D. in finance from McGill University. His research interests lie in domestic and international capital markets and investment, corporate finance, and behavioral finance.