The influence of private equity entrepreneurial investment on firm transaction costs in offshore emerging economies
The influence of private equity entrepreneurial investment on firm transaction costs in offshore emerging economies
Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing’s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
25 July 2025
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Hearn, Bruce
(2025)
The influence of private equity entrepreneurial investment on firm transaction costs in offshore emerging economies.
Academy of Management [AOM] annual meeting 2025, Copenhagen Business School, Copenhagen, Denmark, Copenhagen, Denmark.
25 - 29 Jul 2025.
44 pp
.
Record type:
Conference or Workshop Item
(Paper)
Abstract
Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing’s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.
Text
Caribbean PE Liquidity
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Published date: 25 July 2025
Venue - Dates:
Academy of Management [AOM] annual meeting 2025, Copenhagen Business School, Copenhagen, Denmark, Copenhagen, Denmark, 2025-07-25 - 2025-07-29
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Local EPrints ID: 510387
URI: http://eprints.soton.ac.uk/id/eprint/510387
PURE UUID: fe194f34-e274-4b8c-b317-72540ef830dc
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Date deposited: 30 Mar 2026 16:36
Last modified: 31 Mar 2026 01:57
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