Working Paper Series
The Role of Institutions in the Migration of Corporate Governance Practice into Emerging Economies – The Case of Africa
(), Lars Oxelheim
() and Trond Randøy
Abstract: This study examines the role of institutional environment
in influencing the migration of corporate governance best practice into 22
emerging African economies. Using a unique and comprehensive sample
hand-collected sample of 202 IPO firms from across the continent we adopt a
novel institutional logics perspective in studying the diffusion of CEO
salary disclosure – a central element of corporate transparency. Our
findings reveal that the adoption of CEO salary disclosure by firms is more
likely in more homogenous informal institutional contexts.
Complementarities arising from disclosure originating from an
Anglo-American shareholder value governance framework and indigenous formal
institutions adhering to English common law infer disclosure is more likely
than in contrasting civil code law contexts. Finally firms with higher
proportions of their boards of directors being drawn from indigenous social
elites are less likely to disclose CEO salary – where this is reversed in
the context of elevated institutional quality. Our findings are important
for regulatory authorities, investors and policy makers alike who are
involved in institutional improvements in emerging economies.
Keywords: Disclosure; CEO Salary; Institutional Theory; Africa; Emerging Economies; IPO; (follow links to similar papers)
JEL-Codes: G23; G38; M12; M14; M16; (follow links to similar papers)
53 pages, May 10, 2016
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