Is Ceo Duality Always Negative? An Exploration Of Ceo Duality And Ownership Structure In The Arab Ipo Context

摘要

Manuscript type: EmpiricalrnResearch Question/Issue: This paper examines the relationships between initial public offering (IPO) underpricing, CEOrnduality, and strategic ownership in 12 Arab countries of the Middle East and North Africa (MENA) region.rnResearch Findings/Results: Using all IPOs from January 2000 until the end of July 2007, we document an average IPOrnunderpricing of 184.1 per cent. Underpricing is higher in IPO firms that have CEO duality. However, strategic shareholders,rnsuch as corporations and other industry-related investors, are likely to play a monitoring role whereas underpricing isrnfound to be lower in firms with both CEO duality and strategic shareholder ownership. Moreover, the negative relationrnbetween underpricing and strategic blockholding is greater for foreign strategic ownership than it is for domestic strategicrnownership.rnTheoretical Implications: This paper examines the level and determinants of IPO underpricing in the MENA region. Itrnprovides evidence on the role played by foreign strategic owners in reducing agency conflicts and information asymmetriesrnwithin an environment where firms may be affected by the cultural issues related to political ties and family involvement.rnPractical Implications: Our results contribute to the existing debate on the appropriate regulations for an effective andrnstable financial system in Arab countries. They offer policy-makers additional evidence on the positive impact of marketrnopenness to foreign shareholders.