Corporate decision to remain private in Mozambique: a qualitative study

Purpose - – The purpose of this study was to explore the views of chief finance officers (CFOs) of companies in Mozambique toward understanding corporate decisions to remain private despite the potential benefits of stock market listing. Design/methodology/approach - – The research adopted a qualitative approach. Face-to-face interviews were conducted with 35 CFOs of the top 100 companies in Mozambique. Findings - – Although most of the CFOs interviewed were aware of the existence of the stock exchange of Mozambique, many of them had never considered listing their firms. The major themes that emerged for why they do not use the stock market include the need to maintain ownership and control, not to disclose proprietary information to potential competitors and no need for the stock market because of availability of other sources. Practical implications - – The study is of interest to corporate managers interested in sourcing funds in a manner that meets the peculiar needs of the firm. It is also important for policy makers in the government who are interested in developing relevant financial institutions that meets the need of potential users. Social implications - – New and growth companies drive economic growth through new product development and job creation on which the society depends. Their ability to do this in the long run greatly depends on their ability to access cheaper sources of funds that meet their peculiar needs. Originality/value - – No research has either quantitatively or qualitatively addressed the issue of why firms in Mozambique choose to remain private despite the incentives and potential benefits of listing. Studies conducted in the developed countries are not expected to throw much light on the countries like Mozambique because of the cultural and institutional differences.