Journal of Financial Economics Vol. 80 No. 2 2006
How do family ownership, control and management affect firm value?
Abstract
Using proxy data on all Fortune-500 firms during 1994–2000, we find that family ownership creates value only when the founder serves as CEO of the family firm or as Chairman with a hired CEO. Dual share classes, pyramids, and voting agreements reduce the founder's premium. When descendants serve as CEOs, firm value is destroyed. Our findings suggest that the classic owner-manager conflict in nonfamily firms is more costly than the conflict between family and nonfamily shareholders in founder-CEO firms. However, the conflict between family and nonfamily shareholders in descendant-CEO firms is more costly than the owner-manager conflict in nonfamily firms.
- DOI
- 10.1016/j.jfineco.2004.12.005
- Volume
- 80
- Issue
- 2
- Pages
- 385-417
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref