The Impact of Sovereign Wealth Fund Acquisitions on Corporate Performance and Value. A Comparative Study in the Madrid and Saudi Stock Exchanges
Abstract
This study investigates the influence of sovereign wealth fund (SWF) investments on the financial performance of firms in Saudi Arabia and Spain. Findings indicate that SWF investments exert a notable influence on average share prices, accounting for a considerable portion of the variation in stock values across both countries. Conversely, no significant relationship was found between SWF investments and other financial indicators such as return on investment, liquidity ratio, financial leverage, and profitability ratio.
The analysis underscores the relevance of a firm’s national context when assessing the implications of SWF activity, as such investments may alter ownership structures and strategic directions. Additionally, the study emphasizes that SWF decisions are closely linked to broader economic and political developments, necessitating continuous monitoring and contextual evaluation.
To explore these dynamics, the research utilized statistical tools such as regression models and coefficients of determination, enabling a clear measurement of the investments’ effects on financial indicators.
The study concludes with several recommendations: further investigation into other variables influencing financial performance, stronger collaboration with SWFs as part of strategic investment planning, and improved transparency through consistent financial disclosure. Moreover, longitudinal and cross-sectoral comparative research is encouraged to deepen the understanding of SWF impacts globally.
References
[2] Bahoo, S., Hassan, M. K., Paltrinieri, A. and Khan, A. (2019). A model of the Islamic sovereign wealth fund. Islamic Economic Studies, 27(1): 2–22. DOI: http://dx.doi.org/10.1108/ies-05-2019-0003
[3] Billio, M., Costola, M., Hristova, I., Latino, C., and Pelizzon, L. (2021). Inside the ESG ratings: (Dis)agreement and performance. Corporate Social Responsibility and Environmental Management, 28(5): 1426-1445. DOI: http://dx.doi.org/10.2139/ssrn.3659271
[4] Bortolotti, B., Fotak, V., Megginson, W. L., and Miracky, W. F. (2010). Sovereign wealth fund investment patterns and performance. Journal of Sovereign Wealth Fund Research, 1(1): 5-21. Available at: https://EconPapers.repec.org/RePEc:fem:femwpa:2009.22
[5] Cuervo-Cazurra, A., Grosman, A., and Megginson, W. L. (2023). A review of the internationalization of state-owned firms and sovereign wealth funds: Governments’ nonbusiness objectives and discreet power. Journal of International Business Studies, 54(1): 78-106.
[6] Dewenter, K. L., Han, X. M., and Paul H. (2010). Firm values and sovereign wealth fund investments. Journal of Financial Economics, 98(2): 256-258. DOI: https://doi.org/10.1016/j.jfineco.2010.05.006
[7] Dimitropoulos, P., Koronios, K., Thrassou, A., and Vrontis, D. (2020). Cash holdings, corporate performance and viability of Greek SMEs: Implications for stakeholder relationship management. EuroMed Journal of Business, 15(3): 333-348. DOI: https://doi.org/10.1108/emjb-08-2019-0104
[8] Erkmen, T., Günsel, A., and Altındağ, E. (2020). The role of innovative climate in the relationship between sustainable IT capability and firm performance. Sustainability, 12(10): 4058. DOI:https://doi.org/10.3390/su12104058
[9] Gelb, A., Tordo, S., and Halland, H. (2014). Sovereign wealth funds and long-term development finance: Risks and opportunities. World Bank Policy Research Working Paper No. 6776. Available at: https://ssrn.com/abstract=2394324
[10] Godsell, D. (2022). Financial reporting consequences of sovereign wealth fund investment. Contemporary Accounting Research, 39(3): 2090-2129. DOI: https://doi.org/10.1111/1911-3846.12776
[11] Gupta, H., Kumar, A., and Wasan, P. (2021). Industry 4.0, cleaner production and circular economy: An integrative framework for evaluating ethical and sustainable business performance of manufacturing organizations. Journal of Cleaner Production, 295, 126253. DOI: 10.1016/j.jclepro.2021.126253
[12] Habermann, F. and Steindl, T. (2025). Stock market reactions to a sovereign wealth fund's broad-based public sustainability engagement: European evidence, Journal of Economic Behavior & Organization, Vol 231, 106915. DOI: https://doi.org/10.1016/j.jebo.2025.106915
[13] Hasse, J-B., Lecourt, C. and Siagh, S. (2024). Setting up a sovereign wealth fund to reduce currency crises, Emerging Markets Review, Vol 62. DOI: https://doi.org/10.1016/j.ememar.2024.101191
[14] Hsu, C. C., Quang-Thanh, N., Chien, F., Li, L., and Mohsin, M. (2021). Evaluating green innovation and performance of financial development: mediating concerns of environmental regulation. Environmental Science and Pollution Research, 28(40): 57386-57397. DOI: https://doi.org/10.1007/s11356-021-14499-w
[15] Hübel, B. (2022). Do markets value ESG risks in sovereign credit curves? The Quarterly Review of Economics and Finance, 85: 134-148. DOI: https://doi.org/10.1016/j.qref.2020.11.003
[16] Kartal, M. T. (2020). The behavior of Sovereign Credit Default Swaps (CDS) spread: evidence from Turkey with the effect of Covid-19 pandemic. DOI: http://dx.doi.org/10.2139/ssrn.3642652
[17] Knill, A. M., Lee, B. S., and Mauck, N. (2012). Sovereign wealth fund investment and the return-to-risk trade-off. Journal of Financial Economics, 105(2): 351-366. DOI: http://dx.doi.org/10.2139/ssrn.3943310
[18] Kotter, J., and Lel, U. (2011). Friends or foes? Target selection decisions of sovereign wealth funds and their consequences. Journal of Financial Economics, 101(2), 360–381. Available at: https://pure.psu.edu/en/publications/friends-or-foes-target-selection-decisions-of-sovereign-wealth-fu?utm_source=chatgpt.com
[19] Megginson, W. L., and Fotak, V. (2015). Rise of the fiduciary state: A survey of sovereign wealth fund research. Journal of Economic Surveys, 29(4): 733-778. DOI: http://dx.doi.org/10.2139/ssrn.2432623
[20] Megginson,W. L., Zhou, X. Y., and Gholson, R. L. (2025). The case against a US sovereign wealth fund. Financial Review, 60: 5–12. DOI: https://doi.org/10.1111/fire.12422
[21] Moreau, F. and Aligishiev, Z. (2024). Diversification in sight? A macroeconomic assessment of Saudi Arabia’s vision 2030, International Economics, Volume 180, DOI:https://doi.org/10.1016/j.inteco.2024.100538
[22] Sias, R. W., Starks, L. T., and Titman, S. (2001). The Price Impact of Institutional Trading. SSRN Electronic Journal, 79: 1-27. DOI: http://dx.doi.org/10.2139/ssrn.283779
[23] Starks, L. T. (2023). Presidential address: Sustainable finance and ESG issues—Value versus values. The Journal of Finance, 78(4): 1837-1872. DOI: https://doi.org/10.1111/jofi.13255
[24] Ward, C., Brill, F., and Raco, M. (2022). State capitalism, capitalist statism: Sovereign wealth funds and the geopolitics of London’s real estate market. Environment and Planning A: Economy and Space, 55(3): 742–759. Available at: https://journals.sagepub.com/doi/10.1177/0308518X221102157?icid=int.sj-abstract.citing-articles.22&utm_source=chatgpt.com
[25] Young, K. E. (2020). Sovereign risk: Gulf sovereign wealth funds as engines of growth and political resource. British Journal of Middle Eastern Studies, 47(1): 96-116. DOI:https://doi.org/10.1080/13530194.2020.1714866
[26] Yu, Y., Huo, B., and Zhang, Z. J. (2021). Impact of information technology on supply chain integration and company performance: evidence from cross-border e-commerce companies in China. Journal of Enterprise Information Management, 34(1): 460-489. DOI: https://doi.org/10.1108/jeim-03-2020-0101
[27] International Working Group of Sovereign Wealth Funds. (2020). Sovereign Wealth Funds: Generally Accepted Principles and Practices “The Santiago Principles”. Retrieved from file:///C:/Users/ferna/Downloads/Santiago%20Principles.pdf
[28] KPMG. (2020, February). Mainland China and Hong Kong 2019 review: IPOs and other market trends. Retrieved from https://assets.kpmg.com/content/dam/kpmg/cn/pdf/en/2019/06/mainland-china-and-hong-kong-2019-mid-year-review.pdf
Non-Exclusive License under Attribution 4.0 International Public License (CC BY 4.0):
This ‘Article’ is distributed under the terms of the license CC-BY 4.0., which lets others distribute, remix, adapt, and build upon this article, even commercially, as long as they credit this article for the original creation. ASERS Publishing will be acknowledged as the first publisher of the Article and a link to the appropriate bibliographic citation (authors, article title, volume issue, page numbers, DOI, and the link to the Published Article on ASERS Publishing’ Platform) must be maintained.