Corporate Governance Provisions, Family Involvement, and Firm Performance in Publicly Traded Family Firms

International Journal of Financial Studies

Esra Memili²  Kaustav Misra¹ 

[1] College of Business and Management, Saginaw Valley State University, C326, 7400 Bay Road, University Center, MI 48710, USA; E-Mail:;Bryan School of Business and Economics, University of North Carolina-Greensboro, 370 Bryan, Greensboro, NC 27402, USA

关键词: corporate governance;    principal-principal agency theory;    governance provisions;    family firms;    firm performance;   

DOI  :  10.3390/ijfs3030194

来源: mdpi

【 摘 要 】

This study examines the moderation effects of corporate governance provisions on the link between family involvement (i.e., family ownership and family management) in publicly-traded firms and firm performance by drawing upon agency theory, with a focus on principal-principal agency issues, and the extant family governance literature. We develop and test the hypotheses on 386 of the S&P 500 firms longitudinally. Findings support the hypotheses suggesting the moderation effects of the use of provisions (a) protecting controlling owners in terms of their sustainability of controlling status, and (b) protecting management legally on the inverted U-shaped relationship between family ownership and firm performance. We also found support for the moderation effects of provisions (c) protecting controlling owners in terms of their voting rights, (d) protecting noncontrolling owners, and (e) protecting management monetarily on the inverted U-shaped relationship between family management and firm performance. By this, our study provides empirical support for the principal-principal agency perspective on the corporate governance in publicly-traded family firms. As such, it suggests new avenues of research for both the corporate governance literature, as well as for the theory of the family firm. Our study also offers insights to policy directed toward monitoring the actions of large shareholders such as family and enhancing the overall shareholder value in publicly-traded family firms.

【 授权许可】

CC BY   
© 2015 by the authors; licensee MDPI, Basel, Switzerland.