Since its inception in Feb.2000,the Korean book-building system in Initial Public Offring(IPO) market has been frequently argued due to the adverse function of the system. This paper tried to estimate the valuation effect of various value indicators and non-financial proxy variables reflecting the ex-ante uncertainty in the IPO market of KOSDAQ through the ways of multiple regression analyses and comparative statistics studies.
The empirical results showed that EPS, BVPS(book value per share) and ROS (relative offering size)are important value indicators ,and also that IT companies are more sensitive to these variables than non-IT companies. The extended width of the band allowed for determining the final offer price within the band had no significant and stable effect through the models used. The existence of excessive IPO returns was also confirmed from the relevant sample statistics and the further study indicated that IPO returns had been uneconomically distorted due mainly to institutional investors' abuse of their superior positions in the book-building system for their own interests.
