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

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  • Hearn, Bruce

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.

Suggested Citation

  • Hearn, Bruce, 2011. "The performance and the effects of family control in North African IPOs," International Review of Financial Analysis, Elsevier, vol. 20(3), pages 140-151, June.
  • Handle: RePEc:eee:finana:v:20:y:2011:i:3:p:140-151
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    Citations

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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. "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.
    3. Hearn, Bruce, 2015. "Institutional influences on board composition of international joint venture firms listing on emerging stock exchanges: Evidence from Africa," Journal of World Business, Elsevier, vol. 50(1), pages 205-219.
    4. Hearn, Bruce, 2012. "The contrasting effects of board composition and structure on IPO firm underpricing in a developing context," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 33-44.
    5. Hearn, Bruce, 2014. "The political institutional and firm governance determinants of liquidity: Evidence from North Africa and the Arab Spring," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 31(C), pages 127-158.
    6. Bruce Hearn & Jenifer Piesse, 2015. "The Impact of Firm Size and Liquidity on the Cost of External Finance in Africa," South African Journal of Economics, Economic Society of South Africa, vol. 83(1), pages 1-22, March.
    7. 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.
    8. repec:jfr:ijba11:v:8:y:2017:i:5:p:11-27 is not listed on IDEAS

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