Myth or Reality: Are the Chaebol Firms Financially Differentiated by the Type of Bourse Their Shares Are Listed on?

Myth or Reality: Are the Chaebol Firms Financially Differentiated by the Type of Bourse Their Shares Are Listed on?

This study addresses one of the contemporary issues in finance to identify any financial determinants affecting profitability and growth rate for the Korean chaebol firms listed on the KOSDAQ bourse. General connotations on the financial characteristics of the firms listed on the stock market, may be associated with lower profitability and higher growth rate than those of the firms listed on the KOSPI market which requires more rigorous listing standards in the domestic market. Subsequent to the a prior test for discriminating whether or not the conventional belief may be identified as a Myth or a Reality , the first hypothesis test was implemented by utilizing panel data model to investigate any financial factors characterizing the chaebol firms listed on the KOSDAQ bourse in comparison with those listed on the KOSPI market. Results revealed that the sample firm s size was statistically significant based on the book-value profitability, while MVLEV proxy for market-value leverage, MVBV for market- to book-value of equity, and CRATIO for current ratio, had influences on the market-valued dependent variable. Concerning the outcome of the second hypothesis test utilizing the logistic regression model, only one component in the SGR, retention ratio (RETENTION), was found to be statistically important, thus accounting for its higher level in chaebol firms listed on the KOSDAQ bourse than their KOSPI counterparts.