This article highlights the crucial areas and recent dynamics of the takeover field in family firms and recommends avenues for further research. Employing a bibliometric examination, this study analyzes a sample of 63 studies from the Scopus database on acquisition involving family firms between 1997 and early 2021. The study also performed a systematic literature review of the most significant articles as revealed by the computation. We obtain the prominent authors based on citation analysis. We also find current themes and suggest future research avenues. Despite the worldwide prevalence of family firms, there is less study on the takeover of family firms. The results also show that most of the articles are based on the few most studied theories, such as agency theory, resource-based view and stewardship and stagnation perspective, and so on. The scant studies on the takeover of family firms center around acquisition decisions, determinants of acquisition, and acquisition outcomes, with relatively less attention on measuring non-economic goals, board structure, and generation of family members. Finally, the results indicate that very few studies have focused on cross-industry and cross-country to examine the effect of family ownership on takeover events.
Purpose Takeovers play a critical role as an external corporate governance mechanism to ensure investor protection. There is a long-standing debate on whether the convergence of corporate governance to global standards can enable emerging economies to ensure investor protection. This paper aims to analyse the evolution of the takeover code, namely, Securities Exchange Board of India’s Substantial Acquisition of Shares and Takeovers (2011) in India from the lens of investor protection. It then compares the takeover provisions in India, the USA, the UK, Singapore and Australia to examine the extent of convergence and its implications for investor protection. Design/methodology/approach Using a cross-national comparative analysis of takeover mechanisms in common law countries, the study analyses the extent and relevance of convergence in form. The focus of the comparison is on regulations governing offer size, offer price, creeping acquisition and initial trigger limit for the mandatory open offer. Findings The findings suggest that certain provisions such as the initial trigger threshold for the mandatory offer and the offer prices of the Indian takeover code are converging with the standards in common law countries. However, the offer price determination based on market prices may not reflect true market value in an inefficient market like India. Other provisions such as creeping acquisition and offer size are not only diverging from the international standards but are also inconsistent with the key objective of investor protections of the Indian regulator. Research limitations/implications Indian takeover regulation needs to converge to higher global standards to ensure adherence to improved investor protection. This needs to be done for the initial trigger limit for mandatory bid and offer prices, after accounting for the differences in institutional structure. The Indian regulators need to revisit provisions on the initial trigger, creeping acquisition to converge to the broader principle of investor protection. Originality/value This technical paper provides a comprehensive depiction of takeover mechanisms in an emerging economy context as a means of investor protection. Further using a comparative lens, it analyses the relevance of convergence of takeover laws. Thus, advances the theoretical knowledge of limited extant work on external corporate governance mechanism in an emerging economy context.
We examine how family-ownership influences takeover probability and takeover public announcement abnormal return of Indian publicly traded firms between 2003 and 2019. We find that family ownership has a significantly negative effect on target takeover probability at various levels of family ownership, viz. 20%, 40%, and 51%. Announcement period abnormal returns for target firms are positive at a lower level of family ownership of 20% and negative at a higher level of family ownership of 51%. These results are consistent with the agency cost explanation where family ownership reduces owner-manager agency conflict but exacerbates conflict between majority and minority shareholders. Our results hold for Heckman two-stage model.
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