Review of Financial Studies Vol. 22 No. 8 2009
How Are U. S. Family Firms Controlled?
Abstract
[In large U.S. corporations, founding families are the only blockholders whose control rights on average exceed their cash-flow rights. We analyze how they achieve this wedge, and at what cost. Indirect ownership through trusts, foundations, limited partnerships, and other corporations is prevalent but rarely creates a wedge (a pyramid). The primary sources of the wedge are dual-class stock, disproportionate board representation, and voting agreements. Each control-enhancing mechanism has a different impact on value. Our findings suggest that the potential agency conflict between large shareholders and public shareholders in the United States is as relevant as elsewhere in the world.]
- Volume
- 22
- Issue
- 8
- Pages
- 3047-3091
- Sources
- bibtex:phds-export.bib