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The impact of institutions, ownership structure, business angels, venture capital and lead managers on IPO firm underpricing across North Africa

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journal contribution
posted on 2023-06-08, 23:39 authored by Bruce Hearn
This paper examines the determinants of IPO underpricing in a unique and comprehensive, sample of 86 IPO firms from across North Africa between 2000 and 2013. The findings suggest that, underpricing is used as a mechanism by which to stimulate excess demand (subscription) for newly, issued stock in order to create a relatively small but highly dispersed, and thus disempowered, minority shareholder base. Domestic venture capital and to lesser extend business angels are, associated with elevated underpricing while the reputational impact from foreign venture capital and, lead managers infers lower underpricing. In terms of institutions and state-level corruption control, policies are most closely linked to substantial reductions in underpricing.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Journal of Multinational Financial Management

ISSN

1042-444X

Publisher

Elsevier

Volume

24

Page range

19-42

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2015-12-04

First Open Access (FOA) Date

2016-10-26

First Compliant Deposit (FCD) Date

2016-10-26

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