The impact of listing on banks’ performance: case study from Saudi Arabia

Alsharif, Mohammad

doi:10.21511/bbs.15(3).2020.01

Cited by 5 publications

(5 citation statements)

References 27 publications

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“…Our finding is consistent with the efficient market hypothesis , which states that the stock market can successfully identify mergers that increase shareholder value immediately after they are announced (Delong and DeYoung, 2007). In addition, the results of this study demonstrate the value of the efficient frontier analysis as an essential monitoring tool for Saudi regulators, supporting the claim of Alsharif (2020).…”

Section: Discussionsupporting

confidence: 70%

“…This approach is often criticized for its one-dimensional view that does not capture the full range of factors that contribute to a bank's overall performance. In contrast, the efficient frontier analysis provides a more comprehensive, multidimensional view of bank performance that has been shown to provide a more accurate assessment of a bank's overall health (Alsharif, 2020).…”

Section: Resultsmentioning

confidence: 99%

“…Therefore, following the intermediation approach, loans, other earning assets, staff expenditures, fixed assets and deposits are selected as two outputs and three inputs respectively, as they are the most commonly used in the literature (Alsharif, 2020). Table 2 defines and describes the variables used in the study.…”

Section: Methodsmentioning

confidence: 99%

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Short- and long-term impacts of merger activities in the banking industry: evidence from an emerging market

Alsharif

2023

JFEP

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Purpose This study aims to examine in depth the impact of merger activities on banks in Saudi Arabia. Design/methodology/approach Event study, financial ratio and efficient frontier analyses with a mixture of parametric and non-parametric tests are used for the sample period 2016Q1–2022Q4. Findings Event study analysis shows that merging banks (bidders) have higher positive cumulative abnormal returns than merged banks (targets), indicating that investors believe that bidding banks will benefit the most from the merger strategy. It was also found that the efficiency measures of the combined banks of Saudi British Bank and Alawwal Bank deteriorated, while they improved for the combined banks of National Commercial Bank and Saudi American Bank in the post-merger period, confirming investors' views. Research limitations/implications Although the study focuses on the Saudi banking sector, its findings could be generalized to other banks in the region, as the Saudi banking sector is one of the largest in the Middle East region and is expected to grow further in the future. Practical implications The mere act of merging two banks does not guarantee the realization of cost synergies or efficiency gains. This research shows that mergers are not automatically cost-effective and that their success depends on good integration and restructuring strategies. Originality/value To the best of the author's knowledge, this is the first study to provide a comprehensive analysis of the short- and long-term impacts of merger activities in the Saudi banking sector.

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Section: Discussionsupporting

confidence: 70%

Section: Resultsmentioning

confidence: 99%

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Short- and long-term impacts of merger activities in the banking industry: evidence from an emerging market

Alsharif

2023

JFEP

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“…Therefore, the aim of this study is to extend the literature by extensively investigating the efficiency of Saudi banks and examining their relationship with stock performance. According to Alsharif (2020), the efficient frontier analysis can capture the Saudi bank performance better than the financial ratio analysis, and this is in line with the argument of Siems and Barr (1998), who stated that the efficient frontier analysis is a multi-dimensional measure that takes into account various impacts that go beyond the financial ratio analysis. This study has several contributions to the literature.…”

Section: Introductionsupporting

confidence: 57%

The efficiency of banks and stock performance: Evidence from Saudi Arabia

Alsharif

2021

Cogent Economics & Finance

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The aim of this study is to extend the literature by extensively investigating the efficiency of banks in Saudi Arabia and examining its relationship with stock performance through relying on six measures of efficiency (three price efficiencies and three technical efficiencies). This study employs the data envelopment analysis (DEA) on all listed Saudi commercial banks over the period 2006-2018 ensuring the robustness of the results, and the multiple-regression analysis method is used to empirically test the impact of the efficiency changes on bank stock returns. The results indicate that Saudi banks are more technically efficient, and their price efficiencies are more volatile. Furthermore, changes in bank efficiency are positively related to stock performance; however, these positive relationships are only statistically significant with the changes in profit and scale efficiency measures implying that investors pay much attention to the improvement in bank profitability and future dividends.

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“…First, the DEA is a mathematical tool for measuring efficiency that has been used widely in the various fields of management science, such as energy, industry, banking, education and healthcare areas (Emrouznejad and Yang, 2018). The DEA is the most popular method used in the efficiency literature because it is a non-parametric technique that does not require any assumption regarding the functional form or the error distributions (Alsharif, 2020b). Furthermore, the DEA outperforms the SFA in estimating the efficiency of DMUs according to extensive Monte Carlo simulations (Banker and Natarajan, 2008).…”

Section: Methodology and Datamentioning

confidence: 99%

The efficiency of REITs industry in Saudi Arabia: profit-oriented approach

Alsharif

2021

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PurposeThis study aims to extensively investigate the efficiency of real estate investment trusts (REITs) in Saudi Arabia.Design/methodology/approachThe study employs the data envelopment analysis on 17 Saudi REITs with an innovative profit-oriented approach in selecting REITs' inputs and outputs.FindingsIt is found that the traditional approach underestimates the efficiency of Saudi REITs in comparison with the profit-oriented approach, implying that relying on the traditional approach in assessing the efficiency of REITs will underestimate their efficiency and provide misleading results about their actual performance. However, both approaches showed that Saudi REITs are very efficient in utilizing their inputs, and the major source of their inefficiency is related to their scale inefficiency. Moreover, small Saudi REITs are more efficient than large ones. Finally, a higher level of debt is supposedly associated with lower levels of efficiency, indicating that Saudi REITs should not rely on debt funding because there is no tax advantage from using debt.Originality/valueThis paper has several contributions to the literature. First, it employs an innovative profit-oriented approach in selecting REITs' inputs and outputs. Second, this study focuses on analyzing the efficiency of REITs in Saudi Arabia, which is the largest country in the Middle East region, regarding size, stock market capitalization and gross domestic product. Finally, to the best of the author's knowledge, this is the first study to investigate the efficiency of REITs in Saudi Arabia, and it provides substantial information for REITs' investors and managers about the current efficiency of the Saudi REITs industry.

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The impact of listing on banks’ performance: case study from Saudi Arabia

Cited by 5 publications

References 27 publications

Short- and long-term impacts of merger activities in the banking industry: evidence from an emerging market

Short- and long-term impacts of merger activities in the banking industry: evidence from an emerging market

The efficiency of banks and stock performance: Evidence from Saudi Arabia

The efficiency of REITs industry in Saudi Arabia: profit-oriented approach

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