Firm Acquisitions by Family Firms: a Mixed Gamble Approach

Katrin Hussinger and Abdul-Basit Issah
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Abdul-Basit Issah: LBG Open Innovation in Science Center, Vienna, Austria

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This study elucidates the mixed gamble confronting family firms when considering a related firm acquisition. The socioemotional and financial wealth trade-off associated with related firm acquisitions as well as their long-term horizon turns family firms more likely to undertake a related acquisition than non-family firms, especially when they are performing above their aspiration level. Post-merger performance pattern confirm that family firms are able to create long-term value through these acquisitions and by doing so they surpass non-family firms. These findings stand in contrast to commonly used behavioural agency predictions, but can be reconciled with theory through a mixed gambles’ lens.

Keywords: Firm acquisitions; related firm acquisitions; mixed gamble; aspiration level, socioemotional wealth, value creation (search for similar items in EconPapers)
JEL-codes: G34 L10 L20 M20 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-com and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: Firm acquisitions by family firms: A mixed gamble approach (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:19-16

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