Going private: A socioemotional wealth perspective on why family controlled companies decide to leave the stock-exchange

Börje Boers, Torbjörn Ljungkvist, Olof Brunninge and Mattias Nordqvist

Journal of Family Business Strategy, 2017, vol. 8, issue 2, 74-86

Abstract: Our purpose is to understand the process of ‘going private’ decisions in family firms by applying a socioemotional wealth (SEW) perspective, specified in the following research questions: how do socioemotional wealth considerations influence owning families’ decisions to delist their publicly-listed companies? How do socioemotional wealth considerations change after the delisting of a firm? Based on case studies of two family firms, we elaborate upon the balancing of socioemotional and financial wealth considerations by the family owners, the assessment of which changes over time. Ultimately, we propose that the experiences from being listed can lead to the reevaluation of financial, as well as socioemotional, wealth considerations. By delisting, the companies reclaim independence and control, and the identity as a private family-owned firm becomes once again pronounced. We develop the SEW-perspective by viewing the decision to delist as a mixed gamble, in that owning families have to weigh personal and financial losses against SEW gains, thereby indicating how SEW-considerations change over time. We find that owning families are willing to sacrifice current SEW, accepting current financial losses for prospective increased SEW. Additionally, in this study we extend the argument that decisions to leave the stock market are tradeoffs between competing factors.

Keywords: Socioemotional wealth; Family business; Mixed gamble; Going private; Family ownership; Case study (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1877858515300784
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:fambus:v:8:y:2017:i:2:p:74-86

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/719791/bibliographic
http://www.elsevier. ... 719791/bibliographic

DOI: 10.1016/j.jfbs.2017.01.005

Access Statistics for this article

Journal of Family Business Strategy is currently edited by J.H. Astrachan

More articles in Journal of Family Business Strategy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().