Journal of Banking & Finance Vol. 107 2019
Founding family ownership, stock market returns, and agency problems
Abstract
This paper explores the relationship between founding family ownership and stock market returns. Using the entire population of non-financial firms listed on the Swiss stock market for 2003–2013, we find that the stock returns of family firms are significantly higher than those of non-family firms after adjusting the returns for different firm characteristics and risk factors. Family firms generate an annual abnormal return of 2.8% to 7.1%. We also document that family firms potentially having more agency problems earn higher abnormal returns. Our evidence suggests that outside investors receive a premium for holding shares of these firms as they are exposed to the specific agency problems present in family firms.
- DOI
- 10.1016/j.jbankfin.2019.07.020
- Volume
- 107
- Pages
- 105600
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib