Family Capitalism Corporate Governance Theory

Mohamed Jellal ()

MPRA Paper from University Library of Munich, Germany

Abstract: Family firms, which are prevalent around the world both for small organizations and large corporations, are usually more performant than other types of firms. This paper draws on altruism and on the theory of incentives contracting to explain why family firms perform better. Assuming that altruism only exists in family firms, we show that the strength of family ties has an impact on the optimal contract only under asymmetric information. Then, we extend the analysis to the principal-agent supervisor setting and prove that the recruitment of family members may be seen as a device against collusion within a three-tier hierarchy.

Keywords: Family Capitalism; Altruism; Family Ties; Asymmetric Information; Supervisor Agent Principal; Collusion (search for similar items in EconPapers)
JEL-codes: D21 D64 D82 D86 L2 Z1 (search for similar items in EconPapers)
Date: 2009-10-15
New Economics Papers: this item is included in nep-cta
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17886

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