Institutional Impact on the Expropriation of Private Benefits of Control in North Africa

Hearn, B. (2014). Institutional impact on the expropriation of private benefits of control in North Africa. Research in International Business and Finance, 30(1): 1-23

39 Pages Posted: 28 Mar 2022

See all articles by Bruce Allen Hearn

Bruce Allen Hearn

University of Southampton; University of Bradford - School of Management

Date Written: February 8, 2014

Abstract

This paper examines the effectiveness of six institutional quality measures, namely corruption control, effective government, political stability, regulatory quality, rule of law and voice and accountability, in inhibiting self-rewarding behaviour of boards in terms of their compensation as well as in influencing the likelihood of disclosure of individual executive salaries in IPO listings prospectuses. Using a unique and comprehensive dataset of 78 hand-collected IPO firms from across North Africa from 2000 to 2012 I find substantial evidence that government effectiveness and corruption control are important in inhibiting director self-reward and expropriation while political stability is more associated with increased likelihood of transparency in reporting of salaries. In addition firms from poor informational environments are more likely to initiate enhanced self-governance and transparency so as to overcome institutional deficiencies.

Keywords: IPO; Board of Directors; Institutional Theory; North Africa; MENA

Suggested Citation

Hearn, Bruce Allen, Institutional Impact on the Expropriation of Private Benefits of Control in North Africa (February 8, 2014). Hearn, B. (2014). Institutional impact on the expropriation of private benefits of control in North Africa. Research in International Business and Finance, 30(1): 1-23, Available at SSRN: https://ssrn.com/abstract=4030106 or http://dx.doi.org/10.2139/ssrn.4030106

Bruce Allen Hearn (Contact Author)

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

University of Bradford - School of Management ( email )

Emm Lane
Bradford, West Yorkshire Bd9 4JL
United Kingdom

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