Change in operating performance of initial public offerings and influential factors on performance: A study of non-financial listed companies in hose
Abstract
The study aims to find out if there is difference in operating performance
between companies’ pre- and post- issue and if that difference is in the same trend with
many other companies around the world, which increases before and declines after IPOs.
The study also investigates the influence of 4 independent variables: original ownership
retention, leverage, firm size and firm age on dependent variables: ROA and profit
margin of those companies. The data consists of 60 listed non-financial companies which
provide data of 1 year before and 3 years after the issues. The study uses Balance Sheets
and the Income Statements to compute ratios. The result indicates an increase in
performance in the preceding listing year and a decrease in the following years. While
only leverage and firm age gave out a tight relationship with performance in both terms
of ROA and profit margin, retention and firm size is not statistically significant in
explaining performance.