Technology Special Listing and Underpricing of IPO : The Impact of Bio－Companies and R&D Expense

[Purpose] This study analyzes the difference in the impact of technology special listing on the underpricing of IPO depending on whether pharmaceutical and bio companies are involved and the proportion of R&D expenses. As the regulations on technology special listing are revised, we want to verify how the impact of technology special listing on the undervaluation of public offering prices differs depending on the characteristics of the company at a time when more companies use the system than before. [Methodology] From 2016 to 2022, it was confirmed how the undervaluation rate of public offering prices differs depending on whether pharmaceutical and bio companies are pharmaceutical and the ratio of R&D expenses to sales. [Findings] The main results of this study are as follows. First, among pharmaceutical and bio companies, the undervaluation of the public offering price of companies listed with special technology was found to have eased, but there was no significant difference in the undervaluation of the public offering price in companies in other industries depending on whether or not they are listed with special technology. Second, among companies with a high proportion of R&D expenses to sales, the undervaluation of the public offering price of companies listed with special technology was found to have eased, but in companies where the ratio of R&D expenses to sales was not high, the listing of special technology did not significantly affect the undervaluation of the public offering price. [Implications] The results of this study suggest that the impact of technology special listing on the undervaluation of public offering prices may vary depending on the industry of the company and the proportion of R&D expenditure, suggesting that these two factors need to be considered in improving the technology special listing system in the future.