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Family-owned Business IPOS

The Case of Saudi Arabia

In light of the ongoing restructuring of the Saudi economy, many of the Kingdom's family- owned businesses are contemplating going public. Analyzing thi s current trend is amongst this study's main objectives. The motivations and obsta cles facing family- owned businesses in their decision to go public are discussed. An empirical analysis of the returns realized by Initial Public Offerings (IPOs) on the Saudi Stock Market is also conducted. All studied IPOs are found to have achieved significant abnormal returns during the first month of trading. These returns ar e concentrated in the first week post- IPO. The exceptional performance achieved b y the only family- owned business included in the sample implies such firms' ability t o successfully compete on the Saudi Stock Market. Further research analyzing the performance of Saudi IPOs in general and that of family- owned businesses in par ticular, is necessary for a better understanding of this topic.

In light of the ongoing restructuring of the Saudi economy, many of the Kingdom's family- owned businesses are contemplating going public.