Examining internal capability determinants on firms' financial performance before and after going public: a case of listed firms in Thailand

PurposeThis study aims to empirically analyze the effect of firm financial strengths (liquidity, leverage, and cost of goods sold) and firm characteristics (utilization, tangibility and company size) towards firm financial performance and study the differences of these effects before and after firms going public.Design/methodology/approachThe analysis is based on 159 firms listed on the Stock Exchange of Thailand (SET) during the transition periods of interest from one year before each firm became a listed firm and up to five years after becoming a listed firm (data collection from 2002 to 2019). Fuzzy set qualitative comparative analysis (fsQCA) is applied for the analysis.FindingsThe empirical evidence shows that the firms have to maintain different levels of determinants during different years of operation. Before becoming listed firms, the firms' size plays a significant role in determining the firms' financial performance. Different characteristics are required, according to the size of the firms. One year after becoming listed firms, a low level of production and operating expenses in relation to sales and low leverage are the two important factors for superior financial performance. Then, 2–5 years after becoming listed firms and after a steady state is reached, two more factors, good liquidity and high tangibility, are shown to be significant for good financial performance of the firms.Originality/valueUnlike prior studies, this study explains the causal relationships or combinations of determinants of financial strengths and firm characteristics, before and after going public toward good financial performance of firms, which cannot be identified by analyzing the calendar-year performance.

Rasio Profitabilitas: Mengukur Performance dan Tingkat Kesehatan Perbankan yang Terdaftar di BEI Tahun 2020

The Covid-19 pandemic in Indonesia is still ongoing to this day causing the performance and health level of banking profitability to decline and the financial condition of the country disrupted. Banking profitability can be seen in the value of Return On Asset (ROA) to see the effectiveness of banking in making profits by utilizing total assets. The study aims to analyze the effect of financial ratios consisting of Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), Operating Expenditures to Operating Income (BOPO), and Net Interest Margin (NIM) on Return On Asset (ROA) on banking going public listed on the Indonesia Stock Exchange (IDX) during 2020 during the Covid-19 pandemic. The population in this study was 40 banks with 160 data. Data analysis methods use descriptive statistical tests, classical assumption tests, multiple linear regression tests, t-tests, f-tests, and determination coefficient tests. The results of the study proved that partially the variables CAR, LDR, and BOPO had a negative and significant effect on ROA. NIM has a positive and significant influence on ROA. While NPL has no influence and is not significant to ROA in banks registered with IDX in 2020. Simultaneously car, NPL, LDR, BOPO, and NIM variables have a significant effect on ROA. The implications of the results of the study prove that in the time of the Covid-19 pandemic, the condition of banks registered with the IDX is still healthy and meeting the minimum CAR ratio below 8%, meaning that banks still earn profits from the results of credit capital management to customers. The level of insecurity of the number of bad loans is still low and can still overcome. The value of the operating expense ratio of banking operating.

Impact of Sarbanes Oxley Act on initial public offerings: new evidence from reverse leveraged buyouts

Purpose This paper aims to investigate how the passage of the Sarbanes Oxley Act (SOX) impacted the likelihood and timing of the decision of leveraged buyout (LBO) firms to exit via initial public offering (IPO) (reverse-LBO) and the mediating effect of reputed private equity (PE) firms. Design/methodology/approach The sample comprises firms that went private via LBO between 1990 and 2018. The authors use logistic and ordinary least square regression models to compare the effect of SOX on the re-listing decision and the time taken to re-list. Findings LBO firms were less likely to exit via public offering after SOX, and the time from LBO to IPO was significantly longer for exiting firms post-SOX. PE firm reputation partially reversed the reluctance to exit via IPO and shortened the time to exit. Research limitations/implications The primary focus is RLBOs; the authors do not directly examine other methods of LBO exit. The findings have policy implications for unintended impacts of SOX. Despite the benefits of increasing transparency and protecting investors, SOX reduced the likelihood of going public and increased the time to IPO, potentially reducing product market competition. Originality/value RLBOs present a unique experimental setting as the authors can test the impact of SOX on both the likelihood and time to go public, whereas prior literature using first-time IPO samples are able to test only the likelihood. The authors also show that the reputation of the advising PE firm attenuates the reluctance and time taken for RLBOs to re-list. The authors are, thus, able to provide a new perspective on the impact of SOX on the going public decision.

Intimacy and Estrangement

This article explores the incremental privatization of what is today East Africa's largest corporation, communications and finance firm Safaricom. In the late 1990s and early 2000s, British multinational Vodafone became a partial shareholder of Safaricom, with the government of Kenya retaining the majority stake in the company. This was followed by the company going “public” in 2008 through an Initial Public Offering (IPO). In exploring these transformations, this article demonstrates that privatization was not a singular event but turned on the production of divisibility: a discursive, epistemological, and material process whereby seemingly “classificatory wholes”—a corporation, an infrastructure, a state asset—were first presented and then rendered as partible entities. As the lines between the public and the private were being redrawn, another conceptual series—“citizenship,” “development,” the “public”—were similarly transformed into partible objects subject to division. Unraveling the historical entanglement of the corporation and the state, this article clarifies why, today, Kenyans—some of whom have been reformatted as shareholder-client-citizens—call on Safaricom to act like the state from which it has been incrementally “unbundled.”

Are initial public offerings significant to firm performance in an emerging stock market? Evidence from China

urpose:This study investigates firm performance after going public and explores whether Initial Public Offerings (IPOs) contribute to it.Design/methodology/approach: This study employs comprehensive regression models to examine IPO significance to both operating performance and market performance.Findings/results: It suggests that IPO firms retain their growth over the first 3 years after going public, but the growth does not sustain after the third year in terms of profit-related indicators, which is distinguishing from prior research. IPOs may contribute to firms’ market performance only, they are insignificant to firms’ operating performance in general, whilst industry-adjusted evidence suggests that IPOs are negatively associated with operating performance in terms of return on assets, return on sales and debt to assets.Practical implications: The practical implication for managers is to spend more IPO capitals on business operations to maximise firm value.Originality/value: Market value is taken into account, whilst operating performance is considered only by prior research, and it presents some different findings from prior studies based on developed stock markets.

Private or Public Equity? The Evolving Entrepreneurial Finance Landscape

The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public--and when firms do go public, they are older and have raised more private capital. To understand these facts, we provide a systematic description of the differences between private and public firms. Next, we review several regulatory, technological, and competitive changes affecting both startups and investors that reveal how the trade-offs between going public and staying private have changed. We conclude by listing several open research questions.