Impact of Listing on Performance of Firms Listed At Dar es Salaam Stock Exchange, Tanzania.

Abstract

Purpose: This study is based on empirical information to understand the importance of firms listing in the stock market. It analysed the impact on performance for the listed firms at Dar es Salaam Stock Exchange.

Methodology: The mixed methods approach with an explanatory sequential design and a sample size of 19 listed firms, the data between 1998 and 2019 were used. Matched pairs approach, random effect model and thematic analysis were used to analyse quantitative and qualitative data respectively.

Findings: The study found the firm performance has trajectory increased after listing as noted for both mean and median were change in Return on Equity being 13.09% and 13.37% respectively. The baseline model and robustness check done sector-wise revealed that listing had a statistically positive impact on firm performance.

Research Implications: The study focused on the impact on performance for the listed firms at Dar es Salaam Stock Exchange. It proved that listed firms’ performance improved compared to before listing.

Practical Implication: The study informed firms to go public since it will help them to shift the risk to other shareholders and acquire capital to finance their subsequent growth.

Social Implication: The Policymakers are informed to continue investing more resources in the Dar es Salaam Stock Exchange as they impact positively on firm performance.

Originality:  The study provided evidence that listed firms have improved performance. This study is quite different from previous scholars’ debate and Agency theory arguments highlighted poor performance once the firm list at the stock market.