Founding Family Ownership and Firm Performance: Evidence from the S&P 500

Founding-Family Ownership and Firm Performance: Evidence from the S&P 500 The main careen of this paper by Anderson and Reeb is the question whether family will power is beneficial or detrimental to the future of the company. The arguments against family ownership mental strain on the points of forgoing profit, limited human resource pool, utilisation of company resources for personal reasons and general low company performance. opposite researchers attribute benefits to family ownership like greater monitoring of the mansion, increase motivation as personal fortunes are tied to it, vary knowledge and increased investment horizons. This paper supports family ownership. Using S&P 500 index, they have split the paper into the by-line categories: - section I presents arguments on the impact of family ownership and figure out in public firms. Section II discusses the data and provides unofficial statistics. In Section III, empirical results are provided. Section IV explores the robustness of the results, and Section V provides a summary and concludes the paper. Section 1 starts by describing the drawbacks of family ownership. Fama and Jensen argue that family ownership tends to deviate the firms tar abridge from increasing shareholder worth to personal goals like firm continuity and technological innovations etc.

Another argument that shapes is that family ownership entrenches management and reduces the firm value and the possibility of takeovers. spare dividends and personal benefit are a very universal argument against family ownership. We now look at the potential benefits of family ownership. Family ownership may lead to them having a competitive advantage and as their personal fortunes are attached to the firm they will constantly run the firm to its maximum potential and increase its value. This overly helps to eliminate the free rider problem. Researchers have pointed out that family run firms have longer investment horizons and this avoids investment myopia. Lastly, the fact... If you want to get a full essay, order it on our website: Orderessay

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