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

Hearn, Bruce, Randøy, Trond and Oxelheim, Lars (2016) The institutional determinants of private equity involvement in business groups – the case of Africa. Journal of World Business. ISSN 1090-9516

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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 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.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Research Centres and Groups: Business and Finance Research Group
Subjects: H Social Sciences > HG Finance
Depositing User: Bruce Hearn
Date Deposited: 26 Oct 2016 14:58
Last Modified: 11 Sep 2017 05:21
URI: http://sro.sussex.ac.uk/id/eprint/65073

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