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We examine the implications of special purpose acquisition companies (SPACs) in Korea, where sponsor contracts are better aligned than in the U.S. Unlike the large redemption rate and negative long-run performance observed in the U.S., we find a relatively low redemption rate and positive average buy-and-hold returns in Korean post-merger SPAC targets (de-SPACs). Firms less likely to meet listing requirements are more likely to use SPAC mergers, and de-SPACs increase financing and investment more than traditional IPO firms. Overall, our results suggest SPACs certify private firms with information asymmetry, enabling them to access the public equity market to finance investments.  

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