Earticle

초록

영어

This paper studies the motive of issuing floating-priced convertibles or warrants, known as death spirals, in a country where the private benefit of control is high. Using a total of 199 death spiral issuances by public firms listed in the Korea Stock Exchange during 1998-2006, we find a number of pieces of empirical evidence that are not consistent with the last-resort financing hypothesis, but rather consistent with the control enhancing or control transferring hypothesis. First, operating performance of death spiral issuers are not necessarily poor at the time of the issue nor do they deteriorate over time following the issue. Second, death spiral issuers that are more likely to be motivated by control enhancing or transferring purposes - firms with no subsequent changes in control - exhibit superior operating performance at the time the issue compared to other death spiral or non-death spiral issuers. Third, these firms do not experience a decrease in proportional ownership by the controlling party, while family members other than the controlling shareholder experience the most pronounced increases in the number of shares held. Fourth, in approximately half of these firms, at least one member of the controlling party holds hybrid securities that can be later converted into the firm’s voting shares.

목차

Abstract
 1. Introduction
 2. Death Spirals in Korea
 3. Hypotheses
 4. Data
  A. Sample Construction
  B. Other Data Sources
 5. Results
  A. Summary Statistics
  B. Stock Price Movement following the Death Spiral Issue Announcement
  C. Operating Performance of the Death Spiral Issuers
  D. Subset of Firms Likely to Have Issued Death Spirals for Control-Related Motives
 6. Conclusion
 References
 Appendix

키워드

저자

• Woochan Kim [ Associate Professor of Finance, KDI School of Public Policy and Management ]
• Woojin Kim [ Assistant Professor of Finance, Korea University Business School ]
• Hyung-Seok Kim [ Korea University Business School ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330