상장폐지 발생 후 업종 내 계속상장기업의 재무적 안정성

In this study, I investigate the effect of stock delisting on the financial stability of incumbent firms. On the one hand, delisting may give negative signal to investors about the industry and, thus, incumbent firms will face an increase in uncertainty and an increase in financial costs. If this is the case, incumbent firms may need to keep their financial policy in the more conservative way. On the other hand, when delisting occurs, incumbent firms enjoy the lower degree of competition in the industry which leads the firms to keep more aggressive financial policy. This paper examines these two opposite hypotheses. I divided the sample based on the reason of delisting: going private, liquidated, and being merged and separately analyze the KOSPI and KOSDAQ listed firms. The results show that KOSPI listed firms tend to change their financial policy by reducing leverage and increasing cash holdings when delisting due to going private and being liquidated occurs in the industry. The KOSDAQ listed firms, on the other hand, tend to increase leverage and decrease cash holding when delisting occurs. The results suggest that while KOSPI listed firms are likely to emphasize on financial stability, KOSDAQ listed firms tend to focus more on growth opportunities. The effect of delisting due to being merged is not clear and inconsistent. One of reasons on this obscure effect is because merger can plays as good news as well as as bad news depending on the characteristics of merger deals. The paper contributes to the literature in that it is the first study to investigate the effect of delisting on incumbent firms which stay listed.