Do market participants perceive blockholders’ power and preferences? Locus of control, preference heterogeneity, and firm valuation in the Swiss context
Abstract:This study relies on preference heterogeneity and locus of control research to hypothesize about the impact of control types on firm valuation. We investigate whether market participants discriminate between control types when making investment decisions. Our empirical results of Swiss data suggest that control types represent discrete governance contexts with a unique set of conditions each related to a different level of principal-principal agency costs. Specifically, we find that firms with family ownership… Show more
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