Founding family ownership, stock market returns, and agency problems
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01.10.2018
53
Entreprises familiales
Dividendes
Actionnariat
Actionnaires
Actionnaires minoritaires
Agence, Théorie de l'
Marché financier
2003-2013
Suisse
family firm
ownership structure
abnormal returns, performance, earnings surprise
English
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%. Moreover, family firms potentially having more agency problems earn higher abnormal returns. Although they are more profitable, family firms have lower valuations and regularly surprise markets by announcing better-than-expected earnings. The evidence suggests that outside investors earn a premium for being exposed to the specific agency problems present in family firms.
- Collections
- Faculty
- Faculté des sciences économiques et sociales et du management
- Language
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- English
- Classification
- Economics
- Other electronic version
- Series statement
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- Working Papers SES ; 490 (revised)
- License
- License undefined
- Identifiers
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- RERO DOC 323189
- RERO R008858881
- Persistent URL
- https://folia.unifr.ch/unifr/documents/307007
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