Financial Performance of Firms Before and After Listing on Dar es Salaam Stock Exchange, Tanzania

Abstract

This study measured and compared the financial performance of 17 firms before and after listing on Dar es Salaam Stock Exchange (DSE). The study measured financial performance by use financial ratios which included Return on Sales (ROS), Return on Asset (ROA), Return on Equity (ROE) and Liquidity Ratio (LR). The study applied descriptive research design and Student paired t-test. The study test the null hypothesis stated that, there is no difference in firm financial performance before and after listing (Ho: μ1=μ2). The results showed ROS and LR to have a positive increase after firm listing and their difference were statistically significant at 1%. These findings are useful to investors in stock exchanges market in developing economies in general and DSE in particular. The findings have policy implication for roles of the regulators of stock exchange market, investors monitoring and governance of listed firms, as results indicate that, after listing the financial performance of firms improves compared to before listing. This has implication for attraction of investment from both local and foreign investors because indicators for good performance after listing increase the confidence of shareholders as they become more assured on future financial performance of listed firms.