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The Impact of Vote Differentiation on Investment Performance in Listed Family Firms
Jönköping University, Jönköping International Business School, JIBS, Center for Family Enterprise and Ownership. Jönköping University, Jönköping International Business School, JIBS, Economics.
Jönköping University, Jönköping International Business School, JIBS, Center for Family Enterprise and Ownership.
2010 (English)In: Family Business Review, ISSN 0894-4865, E-ISSN 1741-6248, Vol. 23, no 4, 327-340 p.Article in journal (Refereed) Published
Abstract [en]

This article investigates the effects of separation of ownership and control because of vote differentiation on listed family firms’ investment performance. The authors study the question of whether family-controlled firms have better investment performance than nonfamily firms and whether this investment performance is negatively affected by a separation of ownership and control because of vote differentiation. Marginal q is used as a performance measure. The empirical analysis shows that family control has a positive impact on investment performance when ownership and control are aligned, whereas separation of ownership and control in terms of vote-differentiated shares reduce investment performance.

Place, publisher, year, edition, pages
2010. Vol. 23, no 4, 327-340 p.
Keyword [en]
corporate governance, family firms, dual-class shares, investments, firm performance
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-13944DOI: 10.1177/0894486510379001OAI: oai:DiVA.org:hj-13944DiVA: diva2:377778
Available from: 2010-12-14 Created: 2010-12-14 Last updated: 2016-10-07Bibliographically approved
In thesis
1. Family Ownership and Investment Performance
Open this publication in new window or tab >>Family Ownership and Investment Performance
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation provides an economic analysis of families as owners of large listed firms. The essential research question is whether family ownership provides an efficient form of governance. Family ownership and control is evaluated from different angles; how ownership, control, management, and board structure affects firm performance, and executive compensation.

Chapter two “A Contractual Perspective of the Firm with an Application to the Maritime Industry” is a conceptual paper analyzing the contractual structure of a firm. The chapter conceptualizes the relations between firms, and markets, and gives a transaction cost perspective of why firms are organized the way they are.

The third chapter “The Impact of Vote Differentiation on Investment Performance in Listed Family Firms” investigates ownership and control in Swedish family controlled firms. The analysis shows that family control is beneficial, but only if voting rights and cash-flow rights are aligned.

The fourth chapter “Family Control and Executive Compensation” analyses whether families use remuneration as a way to expropriate minority shareholders. The study shows that managers in family-controlled firms have alower share of variable compensation than managers in non-family controlled firms. The analysis shows further that family control has a reducing effect on the total level of CEO-compensation.

The last chapter “Board of Directors, Dependency, and Returns on Investment” investigates if there is a relationship between ownership structure, board of directors, and firm performance. The marginal q analysis indicate that firm dependent directors have a negative impact on firms’ investment performance. Owner-dependent and employee elected directors do not affect firm investment performance.

To sum up, the empirical results show that family ownership and control affects remuneration in listed firms, and the firm investment performance. The analysis further shows that there are clear differences in the ownership and governance structure between family and non-family controlled firms.

Place, publisher, year, edition, pages
Jönköping: 2010, 2010. 38 p.
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 066
National Category
Economics
Identifiers
urn:nbn:se:hj:diva-14518 (URN)9789186345143 (ISBN)
Public defence
2010-10-22, B1033, Gjuterigatan 5, Jönköping, 16:53 (English)
Opponent
Supervisors
Available from: 2011-02-10 Created: 2011-02-01 Last updated: 2016-10-07Bibliographically approved

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Citation style
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