Entrepreneurship Theory and Practice 2020

Do Family Firms Have Higher or Lower Deal Valuations? A Contextual Analysis

Zulfiquer Ali Haider¹; Jialong Li²; Yefeng Wang³; Zhenyu Wu¹

¹ University of Manitoba · ² University of Newcastle Australia · ³ University of Wisconsin–Whitewater

Abstract

How does the socioemotional wealth (SEW) of a family firm affect its deal valuation in acquisition? Using a sample of 515 completed transactions of S&P 500 firms over the period 2003–2016, we examine a number of contexts and find that SEW creates differential valuations of targets by family firms vis-à-vis non-family firms. Particularly from an internationalization perspective, acquisitions may be an ideal option for family firms because foreign acquisitions may be loosely coupled from the core firm. Post-hoc analyses on the heterogeneity in family governance reveal that founder and descendant board chairs may have different perceptions of SEW.

DOI

10.1177/1042258720910950

Sources

openalex

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓