Trust, family firms, and M&A quality

Gianfranco Siciliano, Annalisa Prencipe and Suresh Radhakrishnan

Asia-Pacific Journal of Accounting & Economics, 2025, vol. 32, issue 1, 1-27

Abstract: This paper examines the effect of trust on the quality of M&A across family and non-family firms. We find that family firms are associated with better M&A quality than non-family firms and that M&A deals involving high trust are of better quality. When we consider the association of trust, family firms and their interaction, we find that trust is the channel/mechanism through which family firms are associated with better M&A quality. Collectively, these results suggest that trust enables family firms to build long-term relationships with employees, suppliers and customers, and potentially mitigate the Type I agency problems.

Date: 2025
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DOI: 10.1080/16081625.2022.2067884

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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