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The performance and the effects of family control in North African IPOs

The performance and the effects of family control in North African IPOs
The performance and the effects of family control in North African IPOs

This paper examines the performance effects of family ownership and influence on board structure and its composition in firms that have recently undergone an initial public offering (IPO) in the North African region. Using a unique and comprehensive hand-collected sample of 63 locally listed IPO firm's from across North Africa we find considerable evidence of a sizeable differential between family and non-family controlled firms. I find considerable evidence supporting increased participation of family members at board level while contrastingly the wider dispersion of family ownership facilitates monitoring and surveillance and mitigates underpricing. Equally in line with the extended network and relationships involved in family firms business angels provide the optimal form of governance in contrast to the more formal private equity and venture capital industry.

Agency Theory, Family firms, IPO, North Africa, Underpricing
1057-5219
140-151
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2

Hearn, Bruce (2011) The performance and the effects of family control in North African IPOs. International Review of Financial Analysis, 20 (3), 140-151. (doi:10.1016/j.irfa.2011.02.006).

Record type: Article

Abstract

This paper examines the performance effects of family ownership and influence on board structure and its composition in firms that have recently undergone an initial public offering (IPO) in the North African region. Using a unique and comprehensive hand-collected sample of 63 locally listed IPO firm's from across North Africa we find considerable evidence of a sizeable differential between family and non-family controlled firms. I find considerable evidence supporting increased participation of family members at board level while contrastingly the wider dispersion of family ownership facilitates monitoring and surveillance and mitigates underpricing. Equally in line with the extended network and relationships involved in family firms business angels provide the optimal form of governance in contrast to the more formal private equity and venture capital industry.

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More information

Accepted/In Press date: 15 February 2011
e-pub ahead of print date: 27 February 2011
Published date: June 2011
Keywords: Agency Theory, Family firms, IPO, North Africa, Underpricing

Identifiers

Local EPrints ID: 423425
URI: http://eprints.soton.ac.uk/id/eprint/423425
ISSN: 1057-5219
PURE UUID: c2f87c1c-cf34-4d91-a7ba-8f3639674496
ORCID for Bruce Hearn: ORCID iD orcid.org/0000-0001-9767-0198

Catalogue record

Date deposited: 21 Sep 2018 16:30
Last modified: 10 Dec 2019 01:23

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