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Revisiting Family Firms

Published online by Cambridge University Press:  12 September 2023

Gianpaolo Parise Open the ORCID record for Gianpaolo Parise [Opens in a new window]
Gianpaolo Parise*
Affiliation:
EDHEC Business School and CEPR
*
[email protected]
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Abstract

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I propose a novel measure to identify family firms based on the number of family links between high-ranking coworkers. Leveraging this measure, I reexamine previous findings in the literature and derive four novel facts: i) Measures of stock ownership misclassify firms with a large family presence. ii) Family-run firms exhibit value stock characteristics, whereas founder-CEO firms display growth stock characteristics. iii) Family-run firms pay lower costs. iv) Family managers behave myopically. I conclude that failing to consider family links can lead to highly misleading results in the study of family firms.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 21
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

I thank an anonymous referee and Mara Faccio (the editor). For useful comments, I also thank Renee Adams, Sumit Agarwal, Ben Cohen, Henrik Cronqvist, Alexander Eisele, Egeman Eren, Francesco Franzoni, Harald Hau, Rania Labaki, Francesco Manaresi, Randall Morck (EFA discussant), Kim Peijnenburg, Lee Sangho (Eurofidai discussant), Denis Sosyura (FIRS discussant), Tony Whited, Xin Zhang, and participants in seminars and conferences at the Bank for International Settlements (BIS), NOVA SBE, Lund University, EDHEC Business School, the University of St. Gallen, the European Economic Association, the European Finance Association, the Financial Intermediation Research Society, the Paris Dauphine Conference in Corporate Governance, and the Eurofidai meetings. I thank Jannic Cutura and Saman Adhami for their excellent research support. Parts of this article were written during research stays at Harvard University and Copenhagen Business School.

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