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THE EFFECTS OF BANKING RELATIONSHIP, LEGAL ORIGIN, PRIVATE EQUITY AND LEAD MANAGERS ON THE PERFORMANCE OF WEST AFRICAN IPO FIRMS
Author(s) -
HEARN BRUCE
Publication year - 2011
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2011.01285.x
Subject(s) - initial public offering , equity (law) , business , listing (finance) , private equity , lead (geology) , club deal , finance , sample (material) , monetary economics , financial system , accounting , private equity fund , economics , chemistry , chromatography , geomorphology , political science , law , geology
This paper examines the performance effects arising from initial primary offering (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 evidence of a considerable reduction in underpricing and costs of equity in firms listing on civil code as opposed to common law markets. Furthermore, I find evidence that firms employing their existing bank as lead manager have higher costs of equity while the employment of a foreign as opposed to domestic lead manager imparts a reduction in underpricing and cost of equity.