Do the Choices of Family Business CEOs Affect Investment Decisions?

Chih-Wei Peng, Huei-Ru Tsai, Kuo-Chih Cheng and Tsung-Fu Chuang

Journal of Applied Finance & Banking, 2023, vol. 13, issue 6, 3

Abstract: Family firms are a common organizational form in emerging economies. Almost 80% of firms are controlled by families and 40% of them are controlled by founder CEOs in Taiwan. Thus, family founders play an important role in complex financial decisions. In addition, the average age of family CEOs is around 60 years old, so now is a big time for the succeeding generation to make the right decisions leading to a successful family business. However, prior studies have contradictory conclusions about the relationship between family firms and investment policies. The sample is based on data from Taiwan family firms for whom the data was manually collected on annul reporting over a period of 2009-2015. Unlike the expectation of the entrenchment effect, we find that both family founder and family descendant CEOs have a propensity to undertake efficient investment decisions, which supports the socioemotional wealth perspective. Â JEL classification numbers: G11, D61, J12.

Keywords: Investment efficiency; Over-investment; Family Founder; Family Descendants. (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.scienpress.com/Upload/JAFB%2fVol%2013_6_3.pdf (application/pdf)

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:spt:apfiba:v:13:y:2023:i:6:f:13_6_3

Access Statistics for this article

More articles in Journal of Applied Finance & Banking from SCIENPRESS Ltd
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().