2018

The Institutional Determinants of Private Equity Involvement in Business Groups – The Case of Africa

Reprint No. 2018:8

Author(s): Bruce Hearn, Lars Oxelheim and Trond RandøyYear: 2018 Title: Journal of World Business Volume (No.): 53 (2) Pages: 118–133
Online article (restrictions may apply)
Preliminary version


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.


Reference:
Hearn, Bruce, Lars Oxelheim and Trond Randøy (2018), "The Institutional Determinants of Private Equity Involvement in Business Groups – The Case of Africa". Journal of World Business 53(2), 118–133.

Lars Oxelheim

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Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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