Journal Emerging Markets Finance and Trade
Volume 51, 2015 - Issue 3, Pages 66-84
 

Sang Koo Kang1, Hyung Cheol Kang2, Joonghyuk Kim3, and Noolee Kim
http://www.tandfonline.com/doi/full/10.1080/1540496X.2015.1039902?scroll=top&needAccess=true

ABSTRACT
We examine the effects of insiders’ ownership type and their pre-IPO ownership changes as well as levels on IPO pricing and insiders’ share-selling behaviors in the Korean IPO market. We find that insiders’ direct ownership level is positively associated with underpricing. We also find that when insiders increase their direct ownership in pre-IPO periods, the probability of insiders’ selling shares after lockup expirations and the amount sold both increase. However, these results do not hold when insiders hold indirect ownership, implying that the role of insiders’ ownership in IPO is limited to the case of direct ownership in the Korean market.

KEY WORDS:
insider selling, IPOs, ownership, strategic behavior