2013
DOI: 10.1108/17439131311298511
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Does family ownership create or destroy value? Evidence from Canada

Abstract: Purpose – The purpose of this paper is to examine whether and how family ownership enhances or damages firm value. Design/methodology/approach – The paper studies a sample of Canadian companies listed on the Toronto Stock Exchange (TSX) between 1999 and 2007 and apply multivariate regression with firm value as a dependent variable. The paper measures firm value as Tobin ' s Q and ROA based either on net income or EBITDA. The independent variables include family firm dummy and ownership percentage… Show more

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Cited by 26 publications
(41 citation statements)
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References 69 publications
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“…Tobin's Q is the ratio of the sum of the market value of equity and total liabilities to lagged total assets (Wang et al, 2017). Sg stands for the growth of sales measured as the log of the first difference of total sales during a year (Pukthuanthong et al, 2013;Rashid & Saeed, 2017).…”
Section: Baseline Modelmentioning
confidence: 99%
“…Tobin's Q is the ratio of the sum of the market value of equity and total liabilities to lagged total assets (Wang et al, 2017). Sg stands for the growth of sales measured as the log of the first difference of total sales during a year (Pukthuanthong et al, 2013;Rashid & Saeed, 2017).…”
Section: Baseline Modelmentioning
confidence: 99%
“…However, the presence of high family ownership can cause entrenchment effects, namely acts of abuse of power that can harm minority shareholders (Fan & Wong, 2002). Higher family ownership makes family wealth tied to the wealth of the company so that manage-ment who is also the owner always tries to reduce all risks of losing their wealth (Pukthuanthong et al, 2013). Family ownership can cause a reduction in long-term investment, which will reduce IC performance (Saleh, Rahman, & Hassan, 2009).…”
Section: Hypotheses Developmentmentioning
confidence: 99%
“…Pukthuanthong, Walker, and Thiengtham () examine the interrelationship of family ownership on firm value with a sample from 1999 to 2007. Family owned companies as defined by the authors as those where the founding family is the largest shareholder (owning more than 20 percent of outstanding shares), or where the CEO or Chair is from the founding family.…”
Section: Ipo Underpricing and Long‐term Performancementioning
confidence: 99%
“…Overall, they find that legal and institutional factors offset underpricing due to variations in accounting transparency, discrepancies in legal and institutional environments and the associated levels of enforcement. Pukthuanthong, Walker, and Thiengtham (2013) examine the interrelationship of family ownership on firm value with a sample from 1999 to 2007. Family owned companies as defined by the authors as those where the founding family is the largest shareholder (owning more than 20 percent of outstanding shares), or where the CEO or Chair is from the founding family.…”
Section: Canadian Environmentmentioning
confidence: 99%