Firm acquisitions by family firms: A mixed gamble approach

Katrin Hussinger and Abdul-Basit Issah

No 19-044, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This study elucidates the mixed gamble confronting family firms when considering a related firm acquisition. The socioemotional and financial wealth trade-off associated with related firm acquisitions as well as their long-term horizon turns family firms more likely to undertake a related acquisition than non-family firms, especially when they are performing above their aspiration level. Post-merger performance pattern confirm that family firms are able to create long-term value through these acquisitions and by doing so they surpass non-family firms. These findings stand in contrast to commonly used behavioural agency predictions, but can be reconciled with theory through a mixed gambles' lens.

Keywords: firm acquisitions; related firm acquisitions; mixed gamble; aspiration level; socioemotional wealth; value creation (search for similar items in EconPapers)
JEL-codes: G34 L10 L20 M20 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/204654/1/1679084216.pdf (application/pdf)

Related works:
Working Paper: Firm Acquisitions by Family Firms: a Mixed Gamble Approach (2019)
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:zbw:zewdip:19044

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().