THE IMPACT OF SOVEREIGN WEALTH FUNDS (PUBLIC INVESTMENT FUND) ON THE PERFORMANCE OF LISTED COMPANIES IN THE SAUDI STOCK EXCHANGE MARKET AN EMPIRICAL STUDY (2016–2024)

This study examines the effect of the Saudi Public Investment Fund, as a sovereign wealth fund, on the financial performance and capital structure of non-financial companies listed on the Saudi Stock Exchange from 2016 to 2024. Following its restructuring under Saudi Vision 2030, the fund has become a strategic institutional investor with significant domestic equity holdings. Despite its growing role, empirical evidence on its firm-level impact remains limited. Using panel data regression techniques and controlling firm-specific characteristics, the study tests the implications of signalling theory and pecking order theory for fund ownership. The findings reveal that fund ownership significantly enhances firm financial performance, measured by return on assets, indicating that institutional government investment strengthens market confidence, corporate governance, and operational efficiency. Conversely, fund ownership does not significantly influence corporate leverage, suggesting that capital structure decisions are primarily determined by firm-specific financial factors. Notably, high leverage diminishes the positive effect of the fund ownership on performance, highlighting the importance of prudent debt management. These results underscore the fund’s role as a value-enhancing investor and provide policy guidance on transparency, governance, and alignment of sovereign investment with corporate performance, supporting the objectives of Saudi Vision 2030.