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The governance implications from presence of long-term foreign investment partner in West African IPO firms
journal contribution
posted on 2023-06-08, 13:31 authored by Bruce HearnThe attraction of blue-chip listings in emerging stock markets is a major policy initiative common across much of the developing world. However in many cases the local blue-chip entities are the result of foreign multinational enterprises (MNE) firms engaging with local partners to form international joint ventures (IJVs) with the local IPO listing the result of the necessity to indigenize ownership as well as political pressures to boost fledgling emerging stock markets thereby attracting investment. Using a unique hand-collected sample of 51 IPO firms from West African region which is characterised by both an abundance of natural resources as well as considerable variation in state-level institutional quality evidence is revealed of limited protection of minority outsider property rights from the implementation of board governance mechanisms such as higher proportions of independent nonexecutives and independent committees. In the light of weak state-level institutional quality and lower levels of nonexecutives with sufficient ownership rights to effectively question decisions by executives and management the evidence suggests outsider investors are at risk from expropriation by insiders. These results underscore the importance of institutional development at state level as a mechanism of ensuring good governance at firm-level
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Publication status
- Published
File Version
- Published version
Journal
Journal of Transnational ManagementISSN
1547-5778Publisher
Haworth PressExternal DOI
Issue
3Volume
17Page range
169-188Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2012-11-13First Compliant Deposit (FCD) Date
2012-11-06Usage metrics
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