The Institutional Determinants of IPO Firm Prospectus Length in a Developing Context

Hearn, B. (2013). The institutional determinants of IPO Firm prospectus length in a developing context. Research in International Business and Finance, 27(1): 52-65

22 Pages Posted: 30 Mar 2022

See all articles by Bruce Allen Hearn

Bruce Allen Hearn

University of Southampton; University of Bradford - School of Management

Date Written: February 9, 2013

Abstract

This study focuses on the impact of institutional quality on the amount of disclosure in IPO firms listing prospectuses using the six well established World Bank Governance indices, namely corruption control, government effectiveness in promotion of private sector development, political stability and absence from terrorism, regulatory quality, rule of law and lastly democratic voice and accountability. Using a unique hand-collected sample of 165 IPO firms from across Africa from 2000 to 2011 I find evidence that enhanced rule of law and regulatory quality impact on the amount of disclosure by firms, reflected in length of IPO listings prospectuses. In addition I find evidence that founder-led entrepreneurial firms are more likely to disclose more alongside firms in extractive and technology industries that rely on local stock exchanges as a source of external finance. In contrast IPO firms that have significant long term foreign partners or are subsidiaries of foreign Multinational Enterprises are likely to disclose less than other types of firm underscoring their apathy to domestic investors and relative lack of dependence on indigenous stock markets as a viable source of external finance.

Keywords: IPO; Board of Directors; Institutional Theory

Suggested Citation

Hearn, Bruce Allen, The Institutional Determinants of IPO Firm Prospectus Length in a Developing Context (February 9, 2013). Hearn, B. (2013). The institutional determinants of IPO Firm prospectus length in a developing context. Research in International Business and Finance, 27(1): 52-65 , Available at SSRN: https://ssrn.com/abstract=4030692

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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