Student Researchers: Moon Jean Cheah, Abbey Lawrence
University: UW-Eau Claire
Adviser: Dr. Hyoseok (David) Hwang
Summary: This research aims to understand how the pandemic has affected capital markets, especially public offering markets where firms raise capital, in South Korea, compared to the U.S. To that end, we explore changes in investor (consumer) sentiment prior to and during the pandemic and investigate how those changes in sentiment have affected public offering markets (IPOs and SPACs). Using hand-collected IPO and SPAC data, we find that SPAC activities grow significantly in volume and size, especially during the pandemic period of 2020-2021. Based on two market sentiment indexes, investor sentiment and consumer sentiment, we find that IPOs (SPAC activities) are positively associated with market sentiment. Overall, we attribute our findings to investors’ willingness to invest in more speculative securities during times of high market sentiment.