 Are founding families less willing to bear risk? Evidence from the currency exposure and internationalization strategy of family firmsRonald C. Anderson, Mikael C. Bergbrant, Delroy M. Hunter and David M. Reeb Financial Management, 2023, vol. 52, issue 1, 41-66 Abstract: Although theory predicts that family firms should be less willing to bear risk than nonfamily firms, prior empirical papers have not found support for this prediction. In this paper, we focus on conditional currency risk because founding families can relatively easily influence their firms’ currency exposure. We find that family firms have relatively lower conditional currency exposure. This result holds for both descendant‐led and nonfamily‐led family firms. Consistent with purposeful actions of founding families, we find that exposure decreases with control‐enhancing mechanisms, such as excess voting rights. The findings also support a wealth‐preservation motive, evidenced by a finding that exposure declines with the number of family beneficiaries. Additional analysis suggests that family firms achieve the relatively lower risk by reducing internationalization depth and limiting exposure to riskier currencies. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:finmgt:v:52:y:2023:i:1:p:41-66 Ordering information: This journal article can be ordered from Access Statistics for this article Financial Management is currently edited by William G. Christie More articles in Financial Management from Financial Management Association International Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.