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Social elites on the board and executive pay in developing countries: evidence from Africa

Social elites on the board and executive pay in developing countries: evidence from Africa
Social elites on the board and executive pay in developing countries: evidence from Africa

This study applies a new multi-focal actor-centered institution-theoretic approach to examine the association between executive pay and the recruitment of social elites to the board of directors in developing countries. We use a sample of 119 initial public offerings (IPOs) from 17 African stock markets to model this relationship. The results suggest that a higher proportion of elites on the board is associated with lower executive pay. This is moderated by institutional quality; that is, lower institutional quality is associated with more directors drawn from social elites and with higher pay, while the opposite is true in higher-institutional-quality environments. Our findings confirm the importance of the social environment within which governance is embedded.

Africa, Emerging economies, IPO, Political economy, Salary, Social elites
1090-9516
230-243
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Strange, Roger
6f7b0a47-0014-4242-ad02-f3476a75322f
Piesse, Jenifer
b85393d2-b4ae-49f2-87cd-8b5007c99e97
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Strange, Roger
6f7b0a47-0014-4242-ad02-f3476a75322f
Piesse, Jenifer
b85393d2-b4ae-49f2-87cd-8b5007c99e97

Hearn, Bruce, Strange, Roger and Piesse, Jenifer (2017) Social elites on the board and executive pay in developing countries: evidence from Africa. Journal of World Business, 52 (2), 230-243. (doi:10.1016/j.jwb.2016.12.004).

Record type: Article

Abstract

This study applies a new multi-focal actor-centered institution-theoretic approach to examine the association between executive pay and the recruitment of social elites to the board of directors in developing countries. We use a sample of 119 initial public offerings (IPOs) from 17 African stock markets to model this relationship. The results suggest that a higher proportion of elites on the board is associated with lower executive pay. This is moderated by institutional quality; that is, lower institutional quality is associated with more directors drawn from social elites and with higher pay, while the opposite is true in higher-institutional-quality environments. Our findings confirm the importance of the social environment within which governance is embedded.

Full text not available from this repository.

More information

Accepted/In Press date: 13 December 2016
e-pub ahead of print date: 13 December 2016
Published date: 1 February 2017
Keywords: Africa, Emerging economies, IPO, Political economy, Salary, Social elites

Identifiers

Local EPrints ID: 423182
URI: http://eprints.soton.ac.uk/id/eprint/423182
ISSN: 1090-9516
PURE UUID: 5abbde7a-d085-45c6-9770-3da53d1bfd92
ORCID for Bruce Hearn: ORCID iD orcid.org/0000-0001-9767-0198

Catalogue record

Date deposited: 19 Sep 2018 16:30
Last modified: 27 Jan 2020 13:56

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