The Effects of Banking Relationship, Private Equity and Lead Managers on the Performance of West African IPO Firms
South African Journal of Economics, 79(4), 430-451
31 Pages Posted: 30 May 2010 Last revised: 20 Nov 2012
Date Written: May 30, 2010
This paper examines the performance effects arising from IPO firms retaining their existing bank as a lead manager together with the effects of foreign and domestic lead managers, corporate insiders and private equity investors across West Africa. Using a unique and comprehensive sample of 37 locally listed IPO firm’s from across West Africa I find considerable differences between listings in civil and common law markets. Furthermore I find considerable evidence of the benefits from retained block-shareholder ownership as a governance mechanism in legal systems characterised by weaker investor protection and substantial benefits from the employment of foreign lead managers over and above their domestic counterparts.
Keywords: IPO, Underpricing, Cost of Equity, West Africa, Agency Theory
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