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The institutional determinants of private equity involvement in business groups-The case of Africa

Hearn, Bruce; Randøy, Trond and Oxelheim, Lars LU (2015) In Journal of World Business
Abstract

This study examines the governance attributes of post-IPO (initial public offering) retained ownership of private equity in business group constituent firms in contrast to their unaffiliated counterparts, in 202 newly listed firms in 22 emerging African economies. We adopt an actor centered institutional-theoretic perspective in rationalizing institutional voids and the advantages of maintained governance by both business angels (BA) and venture capital (VC) private equity. Our findings reveal private equity retain higher post-IPO ownership in business group constituents compared to unaffiliated firms and that this is inversely moderated in the context of improving institutional quality - where this is particularly strong in case of... (More)

This study examines the governance attributes of post-IPO (initial public offering) retained ownership of private equity in business group constituent firms in contrast to their unaffiliated counterparts, in 202 newly listed firms in 22 emerging African economies. We adopt an actor centered institutional-theoretic perspective in rationalizing institutional voids and the advantages of maintained governance by both business angels (BA) and venture capital (VC) private equity. Our findings reveal private equity retain higher post-IPO ownership in business group constituents compared to unaffiliated firms and that this is inversely moderated in the context of improving institutional quality - where this is particularly strong in case of foreign VC as opposed to domestic VC or BA. Our result adds to the literature on multifocal corporate governance mechanisms and the institutional determinants of private equity investment.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
Africa, Business angel, Business group, Institutional voids, IPO, Ownership structure, Property rights protection, Venture capital
in
Journal of World Business
publisher
Elsevier Inc.
external identifiers
  • scopus:84975744277
ISSN
1090-9516
DOI
10.1016/j.jwb.2016.02.002
language
English
LU publication?
yes
id
13cfdaaa-6bf1-48a6-9e30-4119e7676b51
date added to LUP
2016-12-21 14:23:05
date last changed
2017-05-24 13:34:56
@article{13cfdaaa-6bf1-48a6-9e30-4119e7676b51,
  abstract     = {<p>This study examines the governance attributes of post-IPO (initial public offering) retained ownership of private equity in business group constituent firms in contrast to their unaffiliated counterparts, in 202 newly listed firms in 22 emerging African economies. We adopt an actor centered institutional-theoretic perspective in rationalizing institutional voids and the advantages of maintained governance by both business angels (BA) and venture capital (VC) private equity. Our findings reveal private equity retain higher post-IPO ownership in business group constituents compared to unaffiliated firms and that this is inversely moderated in the context of improving institutional quality - where this is particularly strong in case of foreign VC as opposed to domestic VC or BA. Our result adds to the literature on multifocal corporate governance mechanisms and the institutional determinants of private equity investment.</p>},
  author       = {Hearn, Bruce and Randøy, Trond and Oxelheim, Lars},
  issn         = {1090-9516},
  keyword      = {Africa,Business angel,Business group,Institutional voids,IPO,Ownership structure,Property rights protection,Venture capital},
  language     = {eng},
  month        = {03},
  publisher    = {Elsevier Inc.},
  series       = {Journal of World Business},
  title        = {The institutional determinants of private equity involvement in business groups-The case of Africa},
  url          = {http://dx.doi.org/10.1016/j.jwb.2016.02.002},
  year         = {2015},
}