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The financial performance of Saudi Arabian IPOs


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  • Ahmed S. Alanazi
  • Benjamin Liu
  • John Forster
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    Purpose – The purpose of this paper is to examine the different motivational factors that lead to customers' Islamic bank selection decision in Pakistan. In particular, it aims to look into the importance of Shari'a compliance for Islamic banks' customers and thereby the potential risk of deposits withdrawal in case of violations of Shari'a principles. Design/methodology/approach – The paper presents descriptive statistics and cross-tabulation analysis based on data collected from 357 customers. Findings – The findings reveal that Islamic banks' customers highly value Shari'a compliance in their banks and that non-compliance with Shari'a principles leads to disgruntled customers. An interesting pronouncement is that if an Islamic bank is involved in repeated violations of Shari'a, the customers are inclined to switch their banks. Nonetheless, the findings reveal that Shari'a compliance is not the only satisfaction yardstick for Islamic banks' customers; they also expect their banks to be convenient, technologically advanced and provide security of their capital. Practical implications – The paper has profound implications for Islamic financial institutions operating in Pakistan. Although Shari'a compliance is the most important factor that Islamic banks need to observe, they also need to be competitive with conventional banks. Originality/value – The paper is a unique contribution to Islamic banks' selection criteria where the importance of Shari'a compliance and conventional bank patronage factors has been explored. The paper's has practical implications for Islamic banks' owners and regulators.

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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal International Journal of Islamic and Middle Eastern Finance and Management.

    Volume (Year): 4 (2011)
    Issue (Month): 2 (June)
    Pages: 146-157

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    Handle: RePEc:eme:imefpp:v:4:y:2011:i:2:p:146-157

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    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK

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    Keywords: Companies; Corporate ownership; Financial performance; Firms' performance; Initial public offerings; Saudi Arabia;


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Marco Pagano & Fabio Panetta & Luigi Zingales, . "Why Do Companies Go Public? An Empirical Analysis," CRSP working papers 330, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    2. Wang, Changyun, 2005. "Ownership and operating performance of Chinese IPOs," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1835-1856, July.
    3. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-25, June.
    4. Ritter, Jay R., 1987. "The costs of going public," Journal of Financial Economics, Elsevier, vol. 19(2), pages 269-281, December.
    5. Cai, Jun & Wei, K. C. John, 1997. "The investment and operating performance of Japanese initial public offerings," Pacific-Basin Finance Journal, Elsevier, vol. 5(4), pages 389-417, September.
    6. James C. Brau & Stanley E. Fawcett, 2006. "Initial Public Offerings: An Analysis of Theory and Practice," Journal of Finance, American Finance Association, vol. 61(1), pages 399-436, 02.
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    Cited by:
    1. Boriboon Pinprayong & Dr. Sununta Siengthai, 2012. "Restructuring For Organizational Efficiency In The Banking Sector In Thailand: A Case Study Of Siam Commercial Bank," Far East Journal of Psychology and Business, Far East Research Centre, vol. 8(2), pages 29-42, August.


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