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- Title
Family Ownership and Firm Performance: Evidence from India.
- Authors
GUPTA, AMITABH; NASHIER, TRIPTI
- Abstract
We examine how various aspects of family ownership affect both market and accounting performance for an emerging market like India. We also study whether non-family promoters help to reduce the expected agency problems arising between family promoters and outside shareholders. Using feasible generalised least squares for a sample of 1,100 firms listed on BSE during 2007 to 2014, we show that not only do family firms perform worse than non-family firms but also that family ownership has a negative impact on both accounting and market performance of firms. Evidence also indicates that family ownership has a U-shaped relationship with firm performance, suggesting that at higher levels of family ownership, convergence of interest hypothesis may be useful in explaining this positive relationship. Non-family promoters help to improve market value at lower levels of ownership, but as their ownership increases, the beneficial effect of their active monitoring diminishes.
- Subjects
FAMILY-owned business enterprises; ORGANIZATIONAL performance; EMERGING markets; STOCKHOLDER attitudes; CORPORATE accounting
- Publication
Quarterly Journal of Finance & Accounting, 2017, Vol 55, Issue 3/4, p37
- ISSN
1939-8123
- Publication type
Article