EMC Research Fellow
Kuntara Pukthuanthong, Ph.D.
Professor of Finance
kpukthua@mail.sdsu.edu
Dr. Pukthuanthong is a professor of Finance in the College of Business at San Diego State University. She received B.A. in Economics from Chulalonkorn University, Thailand, M.B.A. in Finance from Washington University, and Ph.D. in Finance from University of California, Irvine. In the area of Finance, she is specialized in IPO valuation. She has acquired a lot of research experience throughout her academic career. One of her research articles has been published in the International Corporate Control and Ownership Journal.
Research Abstract
1. How Employee Stock Options and Executive Equity Ownership Enhance Long-term IPO Performance
This paper examines the longer-term performance of IPOs from the expiration of the stabilization period to three
years after the IPO. It seeks to determine whether employee stock options (ESOs) affect long-term market-adjusted
performance after controlling for other influential factors previously uncovered in the IPO and compensation
literature, such as executive cash compensation, profitability, age, size, venture capital backing, underwriter
ranking, industry, book-to-market, analyst growth forecasts, and underpricing. We find that new public companies
granting extensive ESOs outperform companies granting few ESOs for two years after the IPO. In addition, among
IPOs with extensive ESOs, IPOs with high executive equity ownership outperform IPOs with low executive equity
ownership. We offer a theoretical explanation for these results based on managerial risk aversion and
compensation arrangements.
2.IPOs in countries where firms have high family control or ultimate owners
We study the relationship between underwriter prestige of IPOs from the countries where top 20 largest and 10
smallest firm have high family control or have ultimate owners and their underpricing in an international
setting. Data is collected for 5,789 firms that went public across 25 countries between 1995 and 2002.
We find that IPOs from the countries where large and medium firms have high family control or have ultimate
owners and that are underwritten by high-ranking investment bankers doing only domestic deals are more
underpriced than vice versa. This is not consistent with the hypothesis that IPOs in the countries where large
and medium firms have high family control or have ultimate owners benefit from associations with well-known
underwriters, at least within 30 days after going public. Family-controlled firms and firms with ultimate owners
should consider the findings of this study because it identifies factors that are associated with more successful
IPO outcomes.
In their own words
On becoming interested in this particular topic:
I am interested in IPOs because the IPO is one of the most important stages of the firm. (It is) where a startup firm is transformed to a public firm. How each IPO is valued is interesting and how stock prices of these newly public firms move according to their characteristics is still explorable.
What are the implications of this work for the regional (or other) entrepreneurial community?I believe my research on US IPOs or international IPOs, especially IPOs in countries where firms have high family control or ultimate ownership, should benefit at least some companies in San Diego, which is one of the biggest centers of biotech industry in the US. Because of this, San Diego is also home to many venture capital firms and angel investors, who are the backbone financial resources of startup firms.
