计量经济分析 = Econometric analysis

Earnings Management and Investor Protection: An International Comparison

Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, simultaneously, evidence has shown that family firms are flourishing and in fact constitute many of the world’s most innovative firms. Our study contributes to disentangling this puzzling effect. We argue that family firms—owing to the family’s high level of control over the firm, wealth concentration, and importance of nonfinancial goals—invest less in innovation but have an increased conversion rate of innovation input into output and, ultimately, a higher innovation output than nonfamily firms. Empirical evidence from a meta-analysis based on 108 primary studies from 42 countries supports our hypotheses. We further argue and empirically show that the observed effects are even stronger when the CEO of the family firm is a later-generation family member. However, when the CEO of the family firm is the firm’s founder, innovation input is higher and, contrary to our initial expectations, innovation output is lower than that in other firms. We further show that the family firm–innovation input–output relationships depend on country-level factors; namely, the level of minority shareholder protection and the education level of the workforce in the country.

/pdf/doing-more-with-less-innovation-input-and-output-in-family-31iy0en1i5.pdf

Doing More with Less: Innovation Input and Output in Family Firms

Abstract This paper addresses the question whether voluntary adoption of International Financial Reporting Standards (IFRS) is associated with lower earnings management. Ball et al. (Journal of Accounting and Economics, 36(1–3), pp. 235–270, 2003) argue that adopting high quality standards might be a necessary condition for high quality information, but not necessarily a sufficient one. In Germany, a code-law country with low investor protection rights, a relatively large number of companies have chosen to voluntarily adopt IFRS prior to 2005. We investigate whether German companies that have adopted IFRS engage significantly less in earnings management compared to German companies reporting under German generally accepted accounting principles (GAAP), while controlling for other differences in earnings management incentives. Our sample, consisting of German listed companies, contains 636 firm-year observations relating to the period 1999–2001. Our results suggest that IFRS-adopters do not present different earnings management behavior compared to companies reporting under German GAAP. These findings contribute to the current debate on whether high quality standards are sufficient and effective in countries with weak investor protection rights. They indicate that voluntary adopters of IFRS in Germany cannot be associated with lower earnings management.

Earnings Management underGerman GAAP versus IFRS

The Modern Corporation and Private Property

This paper analyzes the question if and how founding families influence the capital structure decision of their firms. By using a unique, partially hand-collected panel dataset of 660 listed German companies (5,135 firm years) over the period 1995–2006, we come up with the following results: German family firms have significantly lower leverage ratios than non-family firms. With respect to the question how families influence the capital structure of their firms, we can show that the family impact is mostly driven via management involvement. In this context, we also detect that the presence of a founder CEO has a strong negative effect on the leverage ratio. Our results prove to be stable against a battery of robustness tests, including the influence of other types of blockholders and the firms’ life cycle. Moreover, we use a propensity-score based matching estimator to alleviate concerns of reverse causality. Overall, our study suggests a strong, negative and causal relationship between family firm characteristics (especially family management) and the level of leverage.

https://www.econstor.eu/bitstream/10419/48400/1/605091218.pdf

Capital structure decisions in family firms: empirical evidence from a bank-based economy

Family firms and R&D behavior–New evidence from a large-scale survey

Manuscript Type
Empirical

Research Question/Issue
This paper empirically tests how founders and their families affect business segment diversification. We contribute to the literature by studying the distinct effects of family ownership, management, and supervision on diversification strategies.

Research Findings/Insights
We use a large panel dataset of listed German firms. Our results indicate a sharp contrast between firms owned by families and those in which the family holds an active management position. Firms owned by families have higher levels of diversification. However, the opposite is true for firms managed by families. Furthermore, other large shareholders perform a monitoring role and induce family owners to concentrate on their core business.

Theoretical/Academic Implications
This paper clearly confirms that family firms comprise a heterogeneous group of firms. Thus, empirical research in this area should carefully distinguish the impact of different channels (i.e., management vs. ownership) families may use to influence corporate decision making. For diversification decisions, we can even show that family ownership and management have an opposite impact. Founding families have to trade off the desire to preserve financial wealth (via diversification) with the risk of losing control and endangering their socioemotional wealth (SEW).

Practitioner/Policy Implications
For policy makers, our results underline that family firms are not a homogeneous group of firms. Hence, it is important to consider their heterogeneity in the political discussion. For example, needs and preferences of family managed firms may differ substantially from those of family owned firms. Equity investors and debt providers should also be aware of this family firm heterogeneity.

https://papers.ssrn.com/sol3/Delivery.cfm/CORG_CORG12091.pdf?abstractid=2600290&mirid=5

Family Firm Heterogeneity and Corporate Policy: Evidence from Diversification Decisions

We analyse whether family firms differ from non-family firms in terms of business segment and geographical diversification or the application of currency hedging instruments. This analysis is based on a unique dataset of 339 publicly listed companies (1,561 firm years) in the German Prime Standard from 2002 to 2006. While there is widespread empirical evidence on differences between family and non-family firms in terms of corporate performance, comparatively little is known about the impact of family firm dimensions on firm behaviour. We try to fill this research gap with a single country study focusing on Germany, an economy where family-control traditionally plays a predominant role in corporate governance. We find that family firms are less diversified in unrelated business segments. However, there are no differences between family firms and non-family firms in terms of overall and related business segment diversification. For geographical diversification, we do not find convincing evidence for any differences. Finally, our analysis indicates that family firms are less likely to use currency hedging instruments. In a second step, we go beyond existing research and distinguish between two separate dimensions of family firms: family management and family ownership. Empirical results indicate that those two dimensions have conflictive effects on firm behaviour. Family management, i.e. the involvement of the founding family into firm management, reduces agency costs and thus leads to lower levels of business segment diversification and less currency hedging. In contrast family ownership leads to risk aversion and more business segment diversification. Overall, the family management aspect is more likely to dominate the family ownership aspect.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1314823_code911494.pdf?abstractid=1314823&mirid=1

Family Firms, Agency Costs and Risk Aversion - Empirical Evidence from Diversification and Hedging Decisions

Around the world (with the US and UK as exceptions) concentrated ownership structures and controlling shareholders are predominant even among listed firms We provide novel empirical evidence how such controlling shareholders, in particular founding families, affect payout policy decisions Thereby, we use a unique panel dataset of 660 listed firms in the 1995 to 2006 period from Germany, an economy that is traditionally characterized by concentrated ownership structures and strong family capitalism We find that family firms exhibit a higher propensity and level for both dividend payments and total payouts This result is driven by family ownership rather than family management Conflicts between the founding family and non-family controlling shareholders and tensions within the founding family are important determinants of payout policy While family blockholder increase the propensity for a payout to shareholders, outside blockholder have an opposing effect Finally, we find that common action problems and conflicts among a multitude of family members and/or generations in 'real family firms' lead to a higher 'taste for dividend payments' if compared to firms dominated by the founder ('founder-controlled firms') Our results prove to be stable against a battery of robustness tests including a matching estimator technique to demonstrate causal effects Overall, our paper contributes to two strands of literature: the emerging literature on family firms and the more mature literature on corporate payout policy

https://www.econstor.eu/bitstream/10419/48413/1/636135624.pdf

Markus Ampenberger

Papers

Capital structure decisions in family firms: empirical evidence from a bank-based economy

Family firms and R&D behavior–New evidence from a large-scale survey

Family Firm Heterogeneity and Corporate Policy: Evidence from Diversification Decisions

Family Firms, Agency Costs and Risk Aversion - Empirical Evidence from Diversification and Hedging Decisions

Controlling shareholders and payout policy: do founding families have a special 'taste for dividends'?