The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
David M Reeb - One of the best experts on this subject based on the ideXlab platform.
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board composition balancing Family influence in s p 500 firms
Administrative Science Quarterly, 2004Co-Authors: Ronald C Anderson, David M ReebAbstract:Recent research indicates that founding families have substantial stakes in roughly one-third of the largest U.S. companies and, in these firms, control nearly twenty percent of all board seats. Burkart, Panunzi, and Shleifer (2003) suggest that a key element in the desirability of Family Ownership is the ability to limit the Family's expropriation of minority shareholders. Consistent with this notion, we find that the most valuable public firms are those in which independent directors balance Family board representation. In contrast, in firms with continued founding Family Ownership and relatively few independent directors, firm performance is significantly worse than in non-Family firms. We also document that moderate Family board presence provides substantial benefits to the firm. Additional tests suggest that families often seek to minimize the presence of independent directors, while outside shareholders seek independent director representation. These findings highlight the importance of independent directors in mitigating shareholder-shareholder conflicts and suggest that considering shareholder-shareholder conflicts provides a richer setting in which to explore corporate governance. Note: A list of the firms classified as Family and non-Family firms is available from the authors.
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founding Family Ownership corporate diversification and firm leverage
Social Science Research Network, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:Anecdotal accounts imply that founding families routinely engage in opportunistic activities that exploit minority shareholders. We gauge the severity of these moral hazard conflicts by examining whether founding families - as large, undiversified blockholders - seek to reduce firm-specific risk by influencing the firm's diversification and capital structure decisions. Surprisingly, we find that Family firms actually experience less diversification than and use similar levels of debt as non-Family firms. Consistent with these findings, we also find that direct measures of equity risk are not related to founding-Family Ownership, suggesting that Family holdings are not limited to low-risk businesses or industries. Although founding-Family Ownership and influence are prevalent and significant in U.S. industrial firms, the results do not support the hypothesis that continued founding-Family Ownership in public firms leads to minority shareholder wealth expropriation. Instead, our results show that minority shareholders in large U.S. firms benefit from the presence of founding families.
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founding Family Ownership corporate diversification and firm leverage
The Journal of Law and Economics, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:Abstract Anecdotal accounts imply that founding families routinely engage in opportunistic activities that exploit minority shareholders. We gauge the severity of these moral hazard conflicts by examining whether founding families—as large, undiversified blockholders—seek to reduce firm‐specific risk by influencing the firm’s diversification and capital structure decisions. Surprisingly, we find that Family firms actually experience less diversification than, and use similar levels of debt as, nonFamily firms. Consistent with these findings, we also find that direct measures of equity risk are not related to founding‐Family Ownership, which suggests that Family holdings are not limited to low‐risk businesses or industries. Although founding‐Family Ownership and influence are prevalent and significant in U.S. industrial firms, the results do not support the hypothesis that continued founding‐Family Ownership in public firms leads to minority‐shareholder wealth expropriation. Instead, our results show that ...
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founding Family Ownership and firm performance evidence from the s p 500
Journal of Finance, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:We investigate the relation between founding-Family Ownership and firm performance. We find that Family Ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find Family firms perform better than nonFamily firms. Additional analysis reveals that the relation between Family holdings and firm performance is nonlinear and that when Family members serve as CEO, performance is better than with outside CEOs. Overall, our results are "inconsistent" with the hypothesis that minority shareholders are adversely affected by Family Ownership, suggesting that Family Ownership is an effective organizational structure. Copyright 2003 by the American Finance Association.
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founding Family Ownership and firm performance evidence from the s p 500
Journal of Finance, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:We investigate the relation between founding-Family Ownership and firm performance. We find that Family Ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find Family firms perform better than nonFamily firms. Additional analysis reveals that the relation between Family holdings and firm performance is nonlinear and that when Family members serve as CEO, performance is better than with outside CEOs. Overall, our results are inconsistent with the hypothesis that minority shareholders are adversely affected by Family Ownership, suggesting that Family Ownership is an effective organizational structure. FOUNDING-FamilyOwnershipAND CONTROL in public U.S. firms is commonly perceived as a less efficient, or at the very least, a less profitable Ownership structure than dispersed Ownership. Fama and Jensen (1983) note that combining Ownership and control allows concentrated shareholders to exchange profits for private rents. Demsetz (1983) argues that such owners may choose nonpecuniary consumption and thereby draw scarce resources away from profitable projects. Shleifer and Vishny (1997) observe that the large premiums associated with superiorvoting shares or control rights provide evidence that controlling shareholders seek to extract private benefits from the firm. More generally, firms with large, undiversified owners such as founding families may forgo maximum profits because they are unable to separate their financial preferences with those of outside owners.1 Families also often limit executive management positions to Family
Bernardo F Quiroga - One of the best experts on this subject based on the ideXlab platform.
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Family Ownership and firm performance evidence from public companies in chile
Family Business Review, 2007Co-Authors: Jon I Martinez, Bernhard S Stohr, Bernardo F QuirogaAbstract:We studied the impact of Family Ownership on firm performance by using a set of data on Chilean firms. From a sample of 175 firms listed on the stock market, the group of 100 Family-controlled firms performed significantly better than the group of 75 nonFamily companies over the 10-year period under study (1995-2004). Three distinct measures of performance - ROA, ROE, and a proxy of Tobin's Q - were employed to test the differences of means between the two groups of firms. These results were in line with our multiple regression model. All these findings support our conceptual framework and hypothesis, which states that public Family firms perform better than public nonFamily firms.
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Family Ownership and firm performance evidence from public companies in chile
Family Business Review, 2007Co-Authors: Jon I Martinez, Bernhard S Stohr, Bernardo F QuirogaAbstract:We studied the impact of Family Ownership on firm performance by using a set of data on Chilean firms. From a sample of 175 firms listed on the stock market, the group of 100 Family-controlled firm...
Lucio Cassia - One of the best experts on this subject based on the ideXlab platform.
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the impact of Family involvement on smes performance theory and evidence
Journal of Small Business Management, 2015Co-Authors: Alfredo Vittorio De Massis, Josip Kotlar, Giovanna Campopiano, Lucio CassiaAbstract:By complementing agency theory with behavioral assumptions, we explore the effects of Family involvement on small and medium enterprises’ (SMEs) performance. We identify three separate dimensions of Family involvement and hypothesize nonlinear, direct, and interaction effects on the performance of an SME. The evidence on 787 SMEs suggests that an inverted U-shaped relationship exists between Family Ownership and performance, and Ownership dispersion among Family members negatively affects performance. Balancing Family and nonFamily members in the top management team (TMT) is found to be beneficial to SMEs’ performance, but the Family ratio in the TMT becomes crucial only at high levels of Family Ownership.
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dispersion of Family Ownership and the performance of small to medium size private Family firms
Journal of Family Business Strategy, 2013Co-Authors: Alfredo Vittorio De Massis, Josip Kotlar, Giovanna Campopiano, Lucio CassiaAbstract:In this study we investigate how the dispersion of Family Ownership among Family members affects the performance of small-to-medium-size Family firms. Based on agency theory and prior research on Family firms, we develop arguments pointing to the existence of a U-shaped relationship between the degree of Family Ownership dispersion and firm performance. We also consider the involvement of Family members in top management as a moderating factor of this relationship. The empirical analyses conducted on 494 small-to-medium size private Family firms in Italy support our hypotheses and offer further evidence about curvilinear relationships between Family Ownership and Family involvement in management, and performance. Overall, our study represents a theoretical synthesis and extension of the effects of Family involvement on the performance of small-to-medium size private firms. It adds empirical evidence to this stream of research, offers new insights into the sources of heterogeneity among the population of Family firms, and paves the way for future investigations on other organizational outcomes, especially firm growth, in Family firms.
Benjamin Maury - One of the best experts on this subject based on the ideXlab platform.
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Family Ownership and firm performance empirical evidence from western european corporations
Journal of Corporate Finance, 2006Co-Authors: Benjamin MauryAbstract:This paper empirically examines how Family-controlled firms perform in relation to firms with nonFamily controlling shareholders in Western Europe. The sample consists of 1672 non-financial firms. Active Family control is associated with higher profitability compared to nonFamily firms, whereas passive Family control does not affect profitability. Active Family control continues to outperform nonFamily control in terms of profitability in different legal regimes. Active and passive Family control is associated with higher firm valuations, but the premium is mainly due to economies with high shareholder protection. The benefits from Family control occur in nonmajority held firms. These results suggest that Family control lowers the agency problem between owners and managers, but gives rise to conflicts between the Family and minority shareholders when shareholder protection is low and control is high.
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Family Ownership and firm performance empirical evidence from western european corporations
Social Science Research Network, 2005Co-Authors: Benjamin MauryAbstract:This research examines whether Family control of afirm increases profitability in areas where laws protect the interests ofminority shareholders.Data were collected in 2002-2003 from 1,672non-financial firms in thirteen Western European countries.Resultsindicate that Family-controlled firms experience a 7 percent greater firmvaluation than firms with non-Family controlling shareholders. In firms where Family members are active (i.e., a Family member holds one ofthe top two officer seats), accounting profits are significantly higher thanthose where Family members are passive shareholders.Firm valuation doesnot appear to be affected by a Family's active control. The classical agency issue between owners and managers is lowered inFamily-owned firms.In the Western European countries considered, themarkets appear to be well-regulated.Consequently, minority shareholdersare not harmed by the Family's control of the firm.Conversely, theresults imply that Family firms in well-regulated markets tend to benefit theminority shareholders through increased firm valuation. (SRD)
Ronald C Anderson - One of the best experts on this subject based on the ideXlab platform.
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board composition balancing Family influence in s p 500 firms
Administrative Science Quarterly, 2004Co-Authors: Ronald C Anderson, David M ReebAbstract:Recent research indicates that founding families have substantial stakes in roughly one-third of the largest U.S. companies and, in these firms, control nearly twenty percent of all board seats. Burkart, Panunzi, and Shleifer (2003) suggest that a key element in the desirability of Family Ownership is the ability to limit the Family's expropriation of minority shareholders. Consistent with this notion, we find that the most valuable public firms are those in which independent directors balance Family board representation. In contrast, in firms with continued founding Family Ownership and relatively few independent directors, firm performance is significantly worse than in non-Family firms. We also document that moderate Family board presence provides substantial benefits to the firm. Additional tests suggest that families often seek to minimize the presence of independent directors, while outside shareholders seek independent director representation. These findings highlight the importance of independent directors in mitigating shareholder-shareholder conflicts and suggest that considering shareholder-shareholder conflicts provides a richer setting in which to explore corporate governance. Note: A list of the firms classified as Family and non-Family firms is available from the authors.
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founding Family Ownership corporate diversification and firm leverage
Social Science Research Network, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:Anecdotal accounts imply that founding families routinely engage in opportunistic activities that exploit minority shareholders. We gauge the severity of these moral hazard conflicts by examining whether founding families - as large, undiversified blockholders - seek to reduce firm-specific risk by influencing the firm's diversification and capital structure decisions. Surprisingly, we find that Family firms actually experience less diversification than and use similar levels of debt as non-Family firms. Consistent with these findings, we also find that direct measures of equity risk are not related to founding-Family Ownership, suggesting that Family holdings are not limited to low-risk businesses or industries. Although founding-Family Ownership and influence are prevalent and significant in U.S. industrial firms, the results do not support the hypothesis that continued founding-Family Ownership in public firms leads to minority shareholder wealth expropriation. Instead, our results show that minority shareholders in large U.S. firms benefit from the presence of founding families.
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founding Family Ownership corporate diversification and firm leverage
The Journal of Law and Economics, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:Abstract Anecdotal accounts imply that founding families routinely engage in opportunistic activities that exploit minority shareholders. We gauge the severity of these moral hazard conflicts by examining whether founding families—as large, undiversified blockholders—seek to reduce firm‐specific risk by influencing the firm’s diversification and capital structure decisions. Surprisingly, we find that Family firms actually experience less diversification than, and use similar levels of debt as, nonFamily firms. Consistent with these findings, we also find that direct measures of equity risk are not related to founding‐Family Ownership, which suggests that Family holdings are not limited to low‐risk businesses or industries. Although founding‐Family Ownership and influence are prevalent and significant in U.S. industrial firms, the results do not support the hypothesis that continued founding‐Family Ownership in public firms leads to minority‐shareholder wealth expropriation. Instead, our results show that ...
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founding Family Ownership and firm performance evidence from the s p 500
Journal of Finance, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:We investigate the relation between founding-Family Ownership and firm performance. We find that Family Ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find Family firms perform better than nonFamily firms. Additional analysis reveals that the relation between Family holdings and firm performance is nonlinear and that when Family members serve as CEO, performance is better than with outside CEOs. Overall, our results are "inconsistent" with the hypothesis that minority shareholders are adversely affected by Family Ownership, suggesting that Family Ownership is an effective organizational structure. Copyright 2003 by the American Finance Association.
-
founding Family Ownership and firm performance evidence from the s p 500
Journal of Finance, 2003Co-Authors: Ronald C Anderson, David M ReebAbstract:We investigate the relation between founding-Family Ownership and firm performance. We find that Family Ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find Family firms perform better than nonFamily firms. Additional analysis reveals that the relation between Family holdings and firm performance is nonlinear and that when Family members serve as CEO, performance is better than with outside CEOs. Overall, our results are inconsistent with the hypothesis that minority shareholders are adversely affected by Family Ownership, suggesting that Family Ownership is an effective organizational structure. FOUNDING-FamilyOwnershipAND CONTROL in public U.S. firms is commonly perceived as a less efficient, or at the very least, a less profitable Ownership structure than dispersed Ownership. Fama and Jensen (1983) note that combining Ownership and control allows concentrated shareholders to exchange profits for private rents. Demsetz (1983) argues that such owners may choose nonpecuniary consumption and thereby draw scarce resources away from profitable projects. Shleifer and Vishny (1997) observe that the large premiums associated with superiorvoting shares or control rights provide evidence that controlling shareholders seek to extract private benefits from the firm. More generally, firms with large, undiversified owners such as founding families may forgo maximum profits because they are unable to separate their financial preferences with those of outside owners.1 Families also often limit executive management positions to Family
