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The institutional determinants of private equity involvement in business groups - The case of Africa
Hearn, Bruce Oxelheim, L. Randøy, T.
Hearn, Bruce
Oxelheim, L.
Randøy, T.
Publication Date
2018-02
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© 2018 Elsevier. Reproduced in accordance with the publisher's self-archiving policy. This manuscript version is made available under the CC-BY-NC-ND 4.0 license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
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Yes
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openAccess
Accepted for publication
11/02/2016
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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.
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Accepted manuscript
Citation
Hearn B, Oxelheim L and Randøy T (2018) The institutional determinants of private equity involvement in business groups - The case of Africa. Journal of World Business. 53(2): 118-133.
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Article