Financial performance index of IPO firms using VIKOR-CRITIC techniques

Sunitha Kumaran

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: Investments in IPO markets are becoming increasingly complex because of the uncertain information and contradictory criteria that needs to be considered during the decision-making process. The main aim of this paper is to apply the Multi-Criteria Decision-Making Technique (MCDM) in order to improve the quality of the financial decision-making process and the quality of the resulting choices. This paper empirically evaluates the performance of IPO firms listed on the Saudi Stock Market using the accounting and value-based financial measures in ‘pre- and post-IPO period’, ranking them using the combined approach of objective weighting method (CRITIC) and the multi-criteria decision-making technique (VIKOR). The ranking list generated through the VIKOR_CRITIC approach will enable investors to identify the best ranked IPO firms and also allow them to make inter-firm comparisons based on the important representative measures drawn from a complex set of financial performance criterion. The combined VIKOR_CRITIC approach used in this study yielded favorable results and it ranked Saudi Airlines Catering Co., Saudi Co. for Hardware and Saudi Ground Services as the best performing IPO firms.

Keywords: MCDM; VIKOR; Objective weighting method; CRITIC; Initial public offering; Financial analysis; Accounting measures; Value-based measures (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005055

DOI: 10.1016/j.frl.2021.102542

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