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

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  • Hearn, Bruce
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    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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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Financial Analysis.

    Volume (Year): 20 (2011)
    Issue (Month): 3 (June)
    Pages: 140-151

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    Handle: RePEc:eee:finana:v:20:y:2011:i:3:p:140-151

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    Web page: http://www.elsevier.com/locate/inca/620166

    Related research

    Keywords: IPO Underpricing Family firms North Africa Agency Theory;

    References

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    Cited by:
    1. Hearn, Bruce, 2013. "The determinants of director remuneration, executive tenure and individual executive disclosure in North African IPO firms," Research in International Business and Finance, Elsevier, vol. 27(1), pages 162-182.
    2. 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, Elsevier, vol. 24(C), pages 19-42.
    3. Hearn, Bruce, 2014. "Institutional impact on the expropriation of private benefits of control in North Africa," Research in International Business and Finance, Elsevier, vol. 30(C), pages 1-23.

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