The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies

Bruce Hearn; Collins Ntim; Venancio Tauringana; Trond Randøy; Lars Oxelheim; John Malagila

The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies

Bruce Hearn^*, Collins Ntim, Venancio Tauringana, Trond Randøy, Lars Oxelheim, John Malagila

^*Corresponding author for this work

Department of Accounting

Research output: Chapter in Book/Report/Conference proceeding › Conference abstract in proceedings › Research › peer-review

Abstract

Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing’s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.

Original language	English
Title of host publication	Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023 : International Business Resilience under Global Disruptions
Editors	Kazuhiro Asakawa, Tunga Kiyak
Number of pages	1
Place of Publication	East Lansing, MI
Publisher	Academy of International Business
Publication date	2023
Pages	248
Publication status	Published - 2023
Event	AIB 2023 Annual Meeting: International Business Resilience under Global Disruptions - SGH Warsaw School of Economics, Warsaw, Poland Duration: 5 Jul 2023 → 9 Jul 2023 Conference number: 65 https://www.aib.world/event/annual-meeting-aib-2023-warsaw/

Conference

Conference	AIB 2023 Annual Meeting
Number	65
Location	SGH Warsaw School of Economics
Country/Territory	Poland
City	Warsaw
Period	05/07/2023 → 09/07/2023
Internet address	https://www.aib.world/event/annual-meeting-aib-2023-warsaw/

Series	Proceedings of the Annual Meeting of the Academy of International Business
ISSN	2078-0435

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Hearn, B., Ntim, C., Tauringana, V., Randøy, T., Oxelheim, L., & Malagila, J. (2023). The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies. In K. Asakawa, & T. Kiyak (Eds.), Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023: International Business Resilience under Global Disruptions (pp. 248). Academy of International Business. https://www.aib.world/wp-content/uploads/2023/08/AIB-2023-Conference-Proceedings.pdf

Hearn, Bruce ; Ntim, Collins ; Tauringana, Venancio et al. / The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies. Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023: International Business Resilience under Global Disruptions. editor / Kazuhiro Asakawa ; Tunga Kiyak. East Lansing, MI : Academy of International Business, 2023. pp. 248 (Proceedings of the Annual Meeting of the Academy of International Business).

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title = "The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies",

abstract = "Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing{\textquoteright}s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.",

author = "Bruce Hearn and Collins Ntim and Venancio Tauringana and Trond Rand{\o}y and Lars Oxelheim and John Malagila",

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booktitle = "Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023",

note = "AIB 2023 Annual Meeting : International Business Resilience under Global Disruptions, AIB2023 ; Conference date: 05-07-2023 Through 09-07-2023",

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Hearn, B, Ntim, C, Tauringana, V, Randøy, T, Oxelheim, L & Malagila, J 2023, The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies. in K Asakawa & T Kiyak (eds), Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023: International Business Resilience under Global Disruptions. Academy of International Business, East Lansing, MI, Proceedings of the Annual Meeting of the Academy of International Business, pp. 248, AIB 2023 Annual Meeting, Warsaw, Poland, 05/07/2023. <https://www.aib.world/wp-content/uploads/2023/08/AIB-2023-Conference-Proceedings.pdf>

The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies. / Hearn, Bruce; Ntim, Collins; Tauringana, Venancio et al.
Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023: International Business Resilience under Global Disruptions. ed. / Kazuhiro Asakawa; Tunga Kiyak. East Lansing, MI: Academy of International Business, 2023. p. 248 (Proceedings of the Annual Meeting of the Academy of International Business).

Research output: Chapter in Book/Report/Conference proceeding › Conference abstract in proceedings › Research › peer-review

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T1 - The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies

AU - Hearn, Bruce

AU - Ntim, Collins

AU - Tauringana, Venancio

AU - Randøy, Trond

AU - Oxelheim, Lars

AU - Malagila, John

N1 - Conference code: 65

PY - 2023

Y1 - 2023

N2 - Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing’s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.

AB - Using a unique, hand-collected sample of 146 firms in the Caribbean region, this paper explores the impact of private equity (PE) ownership on the external financing costs of listed firms in Caribbean offshore economies. Our analysis is based on the ownership competency theory of Foss, Klein, Lien, Zellweger & Zenger (2021) and shows PE ownership increases these costs, as reflected in quoted bid-ask spreads. This relationship is negatively moderated by both the firm having a related party located in an offshore jurisdiction and the adoption of shareholder value governance. Our analysis sheds light on PE financing’s impact in stimulating entrepreneurial regeneration of small island economies and facilitating further broader investment, as well as maturity and exit in PE investment cycles.

M3 - Conference abstract in proceedings

T3 - Proceedings of the Annual Meeting of the Academy of International Business

SP - 248

BT - Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023

A2 - Asakawa, Kazuhiro

A2 - Kiyak, Tunga

PB - Academy of International Business

CY - East Lansing, MI

T2 - AIB 2023 Annual Meeting

Y2 - 5 July 2023 through 9 July 2023

ER -

Hearn B, Ntim C, Tauringana V, Randøy T, Oxelheim L, Malagila J. The External Financing Costs of Private Equity Ownership in Caribbean Offshore Economies. In Asakawa K, Kiyak T, editors, Proceedings of the 65th Annual Meeting of the Academy of International Business. AIB 2023: International Business Resilience under Global Disruptions. East Lansing, MI: Academy of International Business. 2023. p. 248. (Proceedings of the Annual Meeting of the Academy of International Business).