The impact of institutions, ownership structure, business angels, venture capital and lead managers on IPO firm underpricing across North Africa
The impact of institutions, ownership structure, business angels, venture capital and lead managers on IPO firm underpricing across North Africa
This paper examines the determinants of IPO underpricing in a unique and comprehensive, sample of 86 IPO firms from across North Africa between 2000 and 2013. The findings suggest that, underpricing is used as a mechanism by which to stimulate excess demand (subscription) for newly, issued stock in order to create a relatively small but highly dispersed, and thus disempowered, minority shareholder base. Domestic venture capital and to lesser extend business angels are, associated with elevated underpricing while the reputational impact from foreign venture capital and, lead managers infers lower underpricing. In terms of institutions and state-level corruption control, policies are most closely linked to substantial reductions in underpricing.
Agency theory, Business angels, North Africa, Private equity
19-42
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
2014
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Hearn, Bruce
(2014)
The impact of institutions, ownership structure, business angels, venture capital and lead managers on IPO firm underpricing across North Africa.
Journal of Multinational Financial Management, 24 (1), .
(doi:10.1016/j.mulfin.2013.12.002).
Abstract
This paper examines the determinants of IPO underpricing in a unique and comprehensive, sample of 86 IPO firms from across North Africa between 2000 and 2013. The findings suggest that, underpricing is used as a mechanism by which to stimulate excess demand (subscription) for newly, issued stock in order to create a relatively small but highly dispersed, and thus disempowered, minority shareholder base. Domestic venture capital and to lesser extend business angels are, associated with elevated underpricing while the reputational impact from foreign venture capital and, lead managers infers lower underpricing. In terms of institutions and state-level corruption control, policies are most closely linked to substantial reductions in underpricing.
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Accepted/In Press date: 10 December 2013
e-pub ahead of print date: 17 December 2013
Published date: 2014
Keywords:
Agency theory, Business angels, North Africa, Private equity
Identifiers
Local EPrints ID: 423339
URI: http://eprints.soton.ac.uk/id/eprint/423339
ISSN: 1042-444X
PURE UUID: 1cfb0dc2-df2b-4bff-b414-19f53d600064
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Date deposited: 20 Sep 2018 16:30
Last modified: 16 Mar 2024 04:37
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