| Abstract |
The paper attempts to shed light on how group-affiliated firms make their decision on initial public offerings. In particular, we highlight the ｉｍｐｏｒｔance of group-level factors. From our ex ante analysis, using a sample of chaebol affiliated firms in Korea, we find that firms are more likely to go public (i) if a group-controlling shareholder holds high direct share ownership in the company | (ii) if the firm’s contribution to group control is low | ｏｒ (iii) if firms are less likely to benefit from the internal capital market. From our ex post analysis, we find that IPO firms do make heavy capital investments on the IPO year and on the year after. |