Institutional impact on the expropriation of private benefits of control in North Africa

Hearn, Bruce (2014) Institutional impact on the expropriation of private benefits of control in North Africa. Research in International Business and Finance, 30 (1). pp. 1-23. ISSN 0275-5319

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Abstract

This paper examines the effectiveness of six institutional quality measures, namely corruption control, effective government, political stability, regulatory quality, rule of law and voice and accountability, in inhibiting self-rewarding behaviour of boards in terms of their compensation as well as in influencing the likelihood of disclosure of individual executive salaries in IPO listings prospectuses. Using a unique and comprehensive dataset of 78 hand-collected IPO firms from across North Africa from 2000 to 2012 I find substantial evidence that government effectiveness and corruption control are important in inhibiting director self-reward and expropriation while political stability is more associated with increased likelihood of transparency in reporting of salaries. In addition firms from poor informational environments are more likely to initiate enhanced self-governance and transparency so as to overcome institutional deficiencies.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences
Depositing User: Tahir Beydola
Date Deposited: 04 Dec 2015 10:01
Last Modified: 06 Mar 2017 14:32
URI: http://sro.sussex.ac.uk/id/eprint/58651

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