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

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journal contribution
posted on 2023-06-09, 03:45 authored by Bruce Hearn, Trond Randøy, Lars Oxelheim
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.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Journal of World Business

ISSN

1090-9516

Publisher

Elsevier

Issue

2

Volume

53

Page range

118-133

Department affiliated with

  • Accounting and Finance Publications

Research groups affiliated with

  • Business and Finance Research Group Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2016-10-26

First Open Access (FOA) Date

2017-08-27

First Compliant Deposit (FCD) Date

2016-10-26

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