The ownership change and IPO firm performance: Evidence from the six emerging markets

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Alanazi, Ahmed S.
Liu, Benjamin
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2015
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Abstract

This paper investigates the financial and operating performance of IPOs made in the Gulf Cooperation Council (GCC) region for the period of 2003 to 2010. The results suggest that IPO firm performance declines after going public after ownerships are altered in IPOs. The deterioration is associated with the firm transition from private into public ownership perhaps due to increasing agency costs. We also find evidence that supports the lack of opportunity theory because the firm’s growth in sales and capital expenditure in the pre-IPO period is much stronger than the post-IPO period. We also find that size of the firm is positively significant to IPO firm performance.

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Corporate Ownership & Control

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12

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4

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Accounting, auditing and accountability

Banking, finance and investment

Business systems in context not elsewhere classified

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