A Study on the Determinants of the Survivorship of Listed Companies in Korea

Abstract

Using the proportional hazard model developed by Cox (1972,1975), this paper empirically examinesthe determinants of sur-vivorship (or exit) of the listed companies in Korea Stock Ex-change. Our dataset comprises of 719 listed rms whose com-plete nancial statementsare provided by Korea InvestorsService(KIS),Inc. It coversthe period between 1980 and 1998. We ob-tain the following results. The rm size, R& D investment, thelargest shareholder's share and the time between establishmentand listing have favorable eects hasa negative eect. Surpris-ingly,the eggectsofnancial variablessuch ascapital-assetratio,operation income ratio and net income ratio turn out to be insignificant. The industry specific variables such as capital-labor ratio and concentration ratio are also insignificant.