Journal Archive

korean management review - Vol. 49 , No. 5

[ Article ]
korean management review - Vol. 49, No. 5, pp.1269-1294
Abbreviation: kmr
ISSN: 1226-1874 (Print)
Print publication date 31 Oct 2020
Received 05 Jun 2020 Accepted 20 Jul 2020

Ownership-Control Disparity and its Impacts on IPO Performance
Hwanseok Choi ; Yangmin Kim
(First Author) The Institute for Democracy (
(Corresponding Author) Sogang University (

지배주주의 소유-지배 괴리가 IPO 성과에 미치는 영향

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.


Following agency theory, this research examines the effects of the ownership-control disparity of controlling shareholders in Initial Public Offering (IPO) companies. While previous studies in this area have generally reported a negative relationship between the ownership-control disparity of controlling shareholders and firm performance in publicly traded companies, relatively few studies have focused on the effects of ownership-control disparity of controlling shareholders in Korean IPO market. This paper also investigates how corporate governance mechanisms such as venture capital ownership, existence of outside directors, and external auditors, moderate the relationship between ownership-control disparity and IPO performance. To this end, hypotheses were developed and tested with a sample of 226 newly listed companies on the KOSDAQ market from 2011 to 2016. Our results show that (1) ownership-control disparity of controlling shareholders significantly decreases IPO performance, and (2) this negative relationship is mitigated as venture capital ownership and abnormal audit fees for external auditors before listing increase. Based on these results, theoretical contributions and practical implications of the study are discussed.

Keywords: ownership-control disparity, IPO performance, venture capitalist, outside director, abnormal audit fees

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• The author Hwanseok Choi is a doctoral candidate at Sogang University, and serves a research fellow at The Institute for Democracy in Korea. His research interest includes corporate innovation, competitive strategy, corporate governance, and public policy.

• The author Yangmin Kim is Professor of Organization and Strategy at Sogang University. He received his PhD in Strategic Management from Texas A&M University. Before joining Sogang University, he was Assistant Professor of Management at Marquette University in Milwaukee, USA. He also was a visiting scholar at University of Southern California and University of Texas at Dallas. His primary research interests include strategic leadership, corporate governance, founding CEOs, corporate innovation and CEO successions.