Article2001

Founding Family Controlled Firms: Performance, Risk, and Value

Daniel L. McConaughy · Charles H. Matthews · Anne S. Fialko

559 citations0/0 files storedJournal of Small Business Management

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Family Business Performance and Succession Corporate Finance and Governance Financial Reporting and Valuation Research

Abstract

An agency theory framework is used to test the effects of founding family control on firm performance, capital structure, and value. Both the finance and management literatures regarding the relationship between firm control and firm value are explored. Controlling for size, industry, and managerial ownership, the results suggest that firms controlled by the founding family have greater value, are operated more efficiently, and carry less debt than other firms.

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References

1992The Cross-Section of Expected Stock Returns 1980Agency Problems and the Theory of the Firm 1996Multifactor Explanations of Asset Pricing Anomalies 1985The Structure of Corporate Ownership: Causes and Consequences 1966Theory of the Firm 1989The effects of management buyouts on operating performance and value 1998Separation of Ownership and Control 1985Organizational forms and investment decisions

Cited by

2011From Longevity of Firms to Transgenerational Entrepreneurship of Families 2008Family Involvement in Ownership and Management: Exploring Nonlinear Effects on Performance 2013Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments with the Behavioral Agency Model 2007Are family managers agents or stewards? An exploratory study in privately held family firms 2014Ability and Willingness as Sufficiency Conditions for Family-Oriented Particularistic Behavior: Implications for Theory and Empirical Studies 2012The Adolescence of Family Firm Research

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