Essays on Corporate Finance and Asset Pricing

University dissertation from Uppsala : Department of Economics, Uppsala University

Abstract: Essay 1 (with Mattias Hamberg): We study the performance of family firms with large controlling owners using unique hand-collected Swedish data; and consistent with previous studies, we find that founding family firms perform significantly better than other firms. The data allows us to also identify firms with long term non-founding owners (LTNFOs). Because of their long term involvement these owners have similar monitoring abilities. We also find that they use control enhancing mechanisms to a similar extent. However, firms dominated by LTNFOs perform considerably worse. Founders are somewhat more involved in operations and the involvement has a positive association with operating performance. For firms with LTNFOs, the involvement effect is none or negative. The analysis shows that ownership is more important than involvement: The effect is positive for founding family firms, and negative for firms with LTNFOs. In sum, the results challenge the claim that information-advantages and superior monitoring abilities lead to the excess performance of founding family firms.

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