Saudi Arabian IPOs and privatized firms profitability

A sample of 21 privatized and IPO Saudi firms has been examined in this paper. Consistent with the relative literature on privatization and IPOs, we have documented two contrasting outcomes. First, we found that Saudi State Owned Enterprises SOEs and the private joint stock companies are showing a large improvement after-IPO as compared to the pre-IPO financial performance. On the contrary, we found a financial performance deterioration among the family owned businesses or the limited liability type of firms after the IPO compared to the pre-IPO level as measured by the return on assets (ROA) and return on sales (ROS).A sample of 21 privatized and IPO Saudi firms has been examined in this paper. Consistent with the relative literature on privatization and IPOs, we have documented two contrasting outcomes. First, we found that Saudi State Owned Enterprises SOEs and the private joint stock companies are showing a large improvement after-IPO as compared to the pre-IPO financial performance. On the contrary, we found a financial performance deterioration among the family owned businesses or the limited liability type of firms after the IPO compared to the pre-IPO level as measured by the return on assets (ROA) and return on sales (ROS).
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Journal Title

Review of Middle East Economics and Finance

Volume

Issue

DOI

https://doi.org/10.2202/1475-3693.1309

Copyright Statement

© 2011 Berkeley Electronic Press. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.

Subject

Finance

Applied Economics

Publication URI

http://hdl.handle.net/10072/42792

Collection

Journal articles