Legal jurisdiction, director liability law, and venture capitalists’ equity stakes in Africa

Jonathan O. Adongo

Research in International Business and Finance, 2017, vol. 40, issue C, 78-93

Abstract: This article empirically investigates whether shareholder protection features of countries’ legal jurisdictions influence portfolio companies’ venture capital and private equity stakes purchased by general partner firms in Africa. Results indicate general partners purchase lower equity stakes in French civil law, relative to Common law systems, when director liability laws are weak and higher equity stakes in the former when laws are stronger. This supports theory arguing firm level monitoring and shareholder protection, measured by director liability laws, are substitutes on the continent. Results also indicate private benefit extraction gains influence general partner monitoring and portfolio company owners’ effort incentives.

Keywords: Venture capital; Private equity; Corporate governance; Africa (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531916302811
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:40:y:2017:i:c:p:78-93

DOI: 10.1016/j.ribaf.2016.12.002

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().