Adoptive expectations: Rising sons in Japanese family firms

Vikas Mehrotra, Randall Morck, Jungwook Shim and Yupana Wiwattanakantang ()

Journal of Financial Economics, 2013, vol. 108, issue 3, 840-854

Abstract: We find inherited family firms more important in postwar Japan than generally realized, and also performing well on average. Non-consanguineous heir-run firms outperform blood heirs' firms, and roughly match founder-run listed firms, while blood heirs surpass professional managers at running family firms. Further, succession events suggest that adopted heirs “cause” elevated performance. We suggest that heir-run firms do well because non-consanguineous heirs displace the least talented blood heirs, the non-consanguineous heir “job” motivates professional managers, and the threat of displacement encourages blood heirs' effort and human capital accumulation, mitigating the “Carnegie conjecture” that inherited wealth deadens talent.

Keywords: Adoptions; Corporate governance; Family business; Inherited ability; Japan; Succession (search for similar items in EconPapers)
JEL-codes: G3 J12 N25 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (90)

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Working Paper: Adoptive Expectations: Rising Sons in Japanese Family Firms (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:108:y:2013:i:3:p:840-854

DOI: 10.1016/j.jfineco.2013.01.011

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