Founding-family-controlled firms, intergenerational succession, and firm value

Carlos Cid, Pablo San Martin and Paolo Saona

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 3138-3167

Abstract: Using a unique, hand-collected data sample and panel-data econometric techniques, we analyse the impact of founding-family control and intergenerational succession on the value of Chilean listed companies. After controlling for firm- and ownership-specific characteristics, we find an inverse U-shaped relationship between a founding family’s degree of ownership and firm value. Hence, family ownership at first increases firm value. However, when family ownership exceeds a threshold of about 38 percent of outstanding shares, the family takes advantage of its power in the firm and extracts wealth from minority shareholders. Further, if the founder of the company is the CEO or chairman of the board, firm value increases. However, family businesses with a subsequent-generation owner-manager destroy value.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1331677X.2021.1986673 (text/html)
Access to full text is restricted to subscribers.

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:taf:reroxx:v:35:y:2022:i:1:p:3138-3167

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rero20

DOI: 10.1080/1331677X.2021.1986673

Access Statistics for this article

Economic Research-Ekonomska Istraživanja is currently edited by Marinko Skare

More articles in Economic Research-Ekonomska Istraživanja from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().