Are government subsidies or preferential listing policies better for the market performance of tech firms? Evidence from Korea

Tech firms are growth engines in modern economies. We examine which policies, government subsidies or preferential listing, work better for tech firms' performance. We test whether Korean tech firms outperform control firms using key market-based performance metrics. Tech firms benefiting from Korea's preferential listing system outperform control firms in funding, patent creation, and market capitalization but underperform in IPO-day returns. In contrast, government subsidies do not affect market performance other than six-month returns from the IPO date. These findings indicate that preferential listing policies are better than government subsidies for the market performance of tech firms.