게임산업의 규제위험과 자기자본비용: 게임셧다운제도의 사례

Prior studies document that sin stocks, referred to companies in alcohol, tobacco, gambling, and game industries, are valued at discount in the capital market due to investors’ ethical preference. This study empirically assesses a capital market consequence of a product market regulation for game companies. Analyzing 3,146 observations of listed stocks in KOSPI and KOSDAQ, we posit and find that firms in the game industry indeed bear on average 2.3% higher implied costs of equity capital than firms in other industries. More importantly, the difference in costs of equity between game and other industries used to be statistically insignificant but becomes significant after a regulation passage suppressing adolescents’ game activities between 0 and 6 am (i.e., game shutdown). Furthermore, we do not find evidence that operating performance significantly decreases after the regulation. Combined, our results highlight that regulation risk is systematically loaded in firm valuation even when it does not accompany operating consequences. We add to the literature by proposing that any product market regulation, possibly related to ethical preference of regulators, can be an important determinant of sin stock discount.