Gibson Hosea Munisi
The purpose of this study is to examine the difference in financial performance before and after Initial Public Offerings (IPOs) in companies listed in Dar es Salaam Stock Exchange (DSE) in Tanzania. The company financial performance is measured by using accounting performance ratios. Quantitative hypothesis regarding the difference between pre-IPOs and post-IPOs financial performance is tested by computing a significance test on the difference between the mean score of the pre-IPOs and the mean score of the post-IPOs financial performance. The findings indicate there is significant difference between pre-IPOs and post-IPOs financial performance. Specifically, the findings indicate there is significant increase of post-IPOs financial performance. At least, the study indicates there is no significant evidence that pre-IPOs performance is higher than post-IPOs performance. However, the study indicates the results depend on the measurements of performance used in the analysis. The study is of value to various stakeholders who are interested in the financial performance of listed companies in developing countries, particularly in Sub-Sahara Africa. Specifically, these findings are useful to current and potential investors in stock exchanges in developing countries in general and DSE in particular. The findings have policy implications in terms of justifying the regulatory status, shareholder monitoring and governance of listed companies because the results indicate at least performance was listed companies do not deteriorate after IPOs. This has implication in attraction of investment from both domestic and foreign investors because it increases the confidence of investors as they become more optimistic about future performance of IPOs.
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