Working Paper No. 1122

The Role of Institutions in the Migration of Corporate Governance Practice into Emerging Economies – The Case of Africa

Published: May 10, 2016Pages: 53Keywords: Disclosure; CEO Salary, Institutional Theory; Africa; Emerging Economies; IPOJEL-codes: G23; G38; M12; M14; M16

The Role of Institutions in the Migration of Corporate Governance Practice into Emerging Economies – The Case of Africa Bruce Hearn, Lars Oxelheim and Trond Randøy

This study examines the role of institutional environment in influencing the migration of corporate governance best practice into 22 emerging African economies.  Using a unique and comprehensive sample hand-collected sample of 202 IPO firms from across the continent we adopt a novel institutional logics perspective in studying the diffusion of CEO salary disclosure – a central element of corporate transparency. 

Our findings reveal that the adoption of CEO salary disclosure by firms is more likely in more homogenous informal institutional contexts.  Complementarities arising from disclosure originating from an Anglo-American shareholder value governance framework and indigenous formal institutions adhering to English common law infer disclosure is more likely than in contrasting civil code law contexts. 

Finally firms with higher proportions of their boards of directors being drawn from indigenous social elites are less likely to disclose CEO salary – where this is reversed in the context of elevated institutional quality.  Our findings are important for regulatory authorities, investors and policy makers alike who are involved in institutional improvements in emerging economies.

Lars Oxelheim


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Interdisciplinary European Studies

The European Union and the Return of the Nation State


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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