Founding‐Family Ownership, Corporate Diversification, and Firm Leverage

2003 ◽  
Vol 46 (2) ◽  
pp. 653-684 ◽  
Author(s):  
Ronald C. Anderson ◽  
David M. Reeb
Keyword(s):  
Family Ownership ◽  
Corporate Diversification ◽  
Founding Family ◽  
Firm Leverage

Board Composition: Balancing Family Influence in S&P 500 Firms

2004 ◽  
Vol 49 (2) ◽  
pp. 209-237
Author(s):  
Ronald C. Anderson ◽  
David M. Reeb
Keyword(s):  
Family Firms ◽  
Balance Of Power ◽  
Family Influence ◽  
Independent Directors ◽  
Family Ownership ◽  
Board Composition ◽  
Public Firms ◽  
Founding Family ◽  
Board Representation ◽  
Balance Family

We examine the mechanisms used to limit expropriation of firm wealth by large shareholders among S&P 500 firms with founding-family ownership. Consistent with agency theory, 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 find that a 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 conflicts between shareholder groups and imply that the interests of minority investors are best protected when, through independent directors, they have power relative to family shareholders. We argue that expanding the discussion beyond manager-shareholder conflicts to include conflicts between shareholder groups provides a richer setting in which to explore corporate governance and the balance of power in U.S. firms.

Founding family ownership and innovation

2013 ◽  
Vol 20 (4) ◽  
pp. 429-456 ◽  
Author(s):  
Vincent Y.S. Chen ◽  
Shou-Min Tsao ◽  
Guang-Zheng Chen
Keyword(s):  
Family Ownership ◽  
Founding Family

scholarly journals Ownership Structures

2021 ◽  
pp. 27-36
Author(s):  
Jean-Pierre Jeannet ◽  
Thierry Volery ◽  
Heiko Bergmann ◽  
Cornelia Amstutz
Keyword(s):  
Family Ownership ◽  
Ownership Structures ◽  
Early Stages ◽  
Founding Family ◽  
Ownership Stability ◽  
A Company ◽  
Privately Owned ◽  
Over Time ◽  
Ownership Control

AbstractThis chapter details how ownership structures evolved, starting from the early stages of a company to unfolding over time as ownership invariably passed on from one generation to another. Examples are offered on how and under what circumstances companies go public and how founders recruit new owners when ready to pass on the company. Specifically covered are single ownership and family ownership. To provide ownership stability and ownership control, the text describes efforts to keep control within the founding family, ways of passing ownership on to another family, and the process of shareholder agreements. Examples are provided on how companies recruit new owners and how companies approach the decision to go public vs. remaining privately owned.

scholarly journals Corporate diversification: Destroying or increasing firm value? An empirical evidence from Indonesia

2016 ◽  
Vol 14 (1) ◽  
pp. 692-700
Author(s):  
Riswan Riswan ◽  
Eko Suyono
Keyword(s):  
Significant Influence ◽  
Firm Value ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Family Ownership ◽  
Company Size ◽  
Corporate Diversification ◽  
Control Variables ◽  
Excess Value ◽  
Business Sectors

This study aims to investigate the influence of corporate diversification, family ownership and several control variables, i.e, leverage, tobin’s q, earnings growth, company size, company age, business segment, and business sectors (i.e, main sector, manufacturing sector, and service sector) on firm value in the Indonesian listed companies. By using five years (2011-2015) company data, this study uses OLS regression to test the hypotheses. The findings show that corporate diversification negatively influences on firm value, while family ownership does not have significant influence on firm value. Moreover, from the control variables, findings document that leverage and company size positively influence on firm value, while the rest of control variables do not have significant influence on firm value which is measured by excess value of the firm.

Founding family ownership and the agency cost of debt

2003 ◽  
Vol 68 (2) ◽  
pp. 263-285 ◽  
Author(s):  
Ronald C. Anderson ◽  
Sattar A. Mansi ◽  
David M. Reeb
Keyword(s):  
Agency Cost ◽  
Cost Of Debt ◽  
Family Ownership ◽  
Founding Family ◽  
Agency Cost Of Debt

scholarly journals The impact of family ownership on capital structure of firms: Exploring the role of zero-leverage, size, location and the global financial crisis

2018 ◽  
Vol 36 (5) ◽  
pp. 574-604 ◽  
Author(s):  
Joaquim JS Ramalho ◽  
Rui MS Rita ◽  
Jacinto Vidigal da Silva
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
Small Firms ◽  
Family Firms ◽  
Global Financial Crisis ◽  
Supply And Demand ◽  
Family Firm ◽  
Family Ownership ◽  
Firm Leverage ◽  
The Impact

In this article, we investigate the influence of family ownership on firm leverage across different subgroups of family and non-family firms. In addition, we examine the influence of firm size, geographical location and the 2008 global financial crisis on the capital structure of family firms. In both cases, we study the probability of firms using debt and, conditional on its use, the proportion of debt issued. We find that family ownership affects both decisions positively, namely, when the firm is large or located in a metropolitan area. For small firms located outside metropolitan areas, there is no clear family ownership effect. We also find the 2008 crisis had a substantial, but diversified, impact on family firm leverage. On the one hand, all family firms were more prone to use debt after 2008; on the other, the proportion of debt held by levered family firms decreased for micro and small firms, but increased for large firms. Overall, the crisis effects on family firm leverage seem to be the result of both supply- and demand-side factors, with the former particularly affecting the availability of debt to micro and small firms.

Sign in / Sign up

Export Citation Format

Share Document