When Do Shareholder Agreements Add Value? Mitigating Superprincipal-Agency Conflicts in Family Firms

Peter Jaskiewicz, François Belot, J. G. Combs, Emmanuel Boutron and Céline Barrédy
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François Belot: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Emmanuel Boutron: CEROS - Centre d'Etudes et de Recherches sur les Organisations et la Stratégie - UPN - Université Paris Nanterre
Céline Barrédy: CEROS - Centre d'Etudes et de Recherches sur les Organisations et la Stratégie - UPN - Université Paris Nanterre

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Abstract: Researchers are divided on whether shareholder agreements (SAs) improve or hurt firm value. We offer family firms as a context where SAs add value and explain why; SAs limit "superprincipal" agency conflicts between family owners and other family members. A panel of French firms and a second study of French Initial Public Offerings show shareholders value SAs more in family than in nonfamily firms. Among family firms, SAs add greater value when weak governance undermines family owners' resistance to other family members' demands. Our study helps reconcile competing theory about SAs and distinguishes superprincipal conflicts from other family-firm agency problems

Keywords: family business; manuscripts: specialty areas; agency; theory; quantitative; research methods (search for similar items in EconPapers)
Date: 2024
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Published in Entrepreneurship: Theory and Practice, 2024

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04590962

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