Family control and dilution in mergers

Does ownership matter in mergers? A comparative study of the causes and consequences of mergers by family and non-family firms

“…The main objective of this paper is to investigate the differences between family and non-family firms' attitudes towards mergers during the period of high economic growth (1955)(1956)(1957)(1958)(1959)(1960)(1961)(1962)(1963)(1964)(1965)(1966)(1967)(1968)(1969)(1970)(1971)(1972)(1973) Ben-Amar and Andre (2006) and Basu et al (2009) investigate the relationship between family ownership and stock market evaluation. Lewellen et al (1985) and Hubbard and Palia (1995) show that managerial ownership has a positive relationship with reactions from the stock market.…”

“…According to Basu et al (2009), ownership structure difference between family and non-family firms is more apparent among young firms than among mature ones. Thus, by focusing on newly listed firms in the 1960s, we expect to observe distinct differences between family and non-family firms in their ownership structure and strategy.…”

Founder CEO management and the long-run investment performance of IPO firms

“…Additionally, during the transition to a public company, founder CEO leadership provides continuity and reduces risks associated with radical strategic shifts that require knowledge, resources, or competencies that the firm typically does not have (Aldrich, 1979;Fischer and Pollock, 2004). Since a newly public firm typically does not have an established reputation of its own, it relies heavily on the reputation of its founder to attract the attention of investors (Basu et al, 2009). Further, research indicates that founder CEOs differ from professional CEOs on several intrinsic and extrinsic attributes, that in turn, are likely to impact post-IPO performance positively.…”

Entrenchment, governance, and the stock price reaction to sudden executive deaths

“…21 If executive ownership is zero but board ownership is not zero, board power to 10, which is the 1%ile of this measure without these observations. If executive ownership and board ownership is zero, then board power to 1, as the board and executive have equal power.22 A recent literature has looked at different corporate finance issues for family firms (see for example,Basu, 2009 andBennedsen et al 2007). In unreported results, I test whether the stock price reaction to sudden executive deaths is different for deaths in family firms but obtain no significant results.…”