Vision 2030 Transforms Saudi Capital Markets: Analysis of IPO Performance Revolution

Abstract

This study investigates how Saudi Arabia's Vision 2030 economic transformation program affects both Initial Public Offering (IPO) results and capital market efficiency. The study evaluates 148 Saudi IPOs from 2003-2025 through event study analysis by using Vision 2030's January 2017 implementation as a natural experiment to examine market dynamic changes. Vision 2030 implementation led to major enhancements in market efficiency. The IPO underpricing decreased substantially from 75.2% during the pre-Vision period (2003-2016) to 12.9% after Vision 2030 implementation (2017-2025) which resulted in an 82.8% efficiency improvement that aligns Saudi market performance with developed market standards. The long-term analysis demonstrates continuous positive return because 12-month buy-and-hold abnormal returns stay positive while controlling excessive speculative returns. The performance enhancements in the market depend on three main factors which include firm size and sector alignment with Vision 2030 objectives and market demand. The research shows that Vision 2030's complete institutional reforms which included regulatory improvements and market access expansion and transparency enhancements have created fundamental changes in Saudi capital markets. The research demonstrates that systematic economic transformation programs can effectively build efficient capital markets in oil-dependent economies thus providing practical guidance for resource-rich nations that want to diversify their economies through capital market development.