Governance Structure and Firm Performance in Private Family Firms

Che, Limei; Langli, John Christian

doi:10.1111/jbfa.12170

Cited by 41 publications

(38 citation statements)

References 92 publications

(152 reference statements)

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“…Consistent with Che and Langli (2015), considered a sample of Norwegian firms and found that smaller board effectively contributes to firm performance. Kamazima, Mathenge, and Ngui (2017), also explored the negative effect of board size on firm performance.…”

Section: Literature Review Board Sizementioning

confidence: 80%

The Moderating Effect of Intellectual Capital on the Relationship Between Corporate Governance and Companies Performance in Pakistan

Khan

Ali

2018

JGI

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During the global financial crises, the prominence of corporate governance was realized after the major loopholes identified in corporate policies and conspicuous corporate scandals all over the world. Developed countries have passed several laws such as the “Say on Pay” or the “Sarbanes-Oxley Act” to protect the shareholder's wealth. On the contrary, developing countries are still thriving to gain effective corporate governance recognition. This study examined the moderating effect of intellectual capital on the relationship between corporate governance and firm performance. The current study uses four-year panel data from 2012 to 2015. Linear regression, correlated panels corrected standard errors (PCSEs) are used in the analysis. The findings of the study indicate that the intellectual capital has a significant effect on the relationship between board size, board financial expertise, CEO duality, gender diversity and firm performance (ROA). On the other hand, it does not seem to moderate the relationship between board independence and firm performance (ROA). Similarly, the findings indicate that intellectual capital has a significant relationship between board size, board independence, CEO duality, gender diversity and firm performance (ROE) has no moderating effect on the relationship between board financial expertise and firm performance (ROE). Moreover, the empirical results highlight the significance of intellectual capital for regulations and policy making.

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Section: Literature Review Board Sizementioning

confidence: 80%

The Moderating Effect of Intellectual Capital on the Relationship Between Corporate Governance and Companies Performance in Pakistan

Khan

Ali

2018

JGI

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“…9 We thank the reviewer for the suggestion of using attributes of family CEOs. 10 The board structure might be less important than the ownership structure for firm performance in private family firms (Che and Langli 2015). 11 Note that this is different from CEO duality, which refers to the case that the CEO and the chair of the board are the same person.…”

Section: Control Variablesmentioning

confidence: 97%

The impact of family CEO’s ownership and the moderating effect of the second largest owner in private family firms

Che

Zhang

2016

J Manag Gov

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This study explores two ownership issues in private family firms. First, we investigate the relationship between the ownership of family CEOs and firm performance, and postulate that this relationship in private family firms is more complex than the inverted ''U'' relationship found in public family firms. Second, we predict a potential moderating effect of the second largest owner, who may exert a monitoring role on family CEOs. We focus on private family firms as recent studies show that private family firms have distinct features compared to public family firms, and that findings documented in public family firms may not apply to the ubiquitous, but much less studied, private family firms. We have applied agency theory to develop the two hypotheses, used secondary data on a large sample of private family firms, utilized an adjusted conventional quadratic technique to test the hypotheses, and validated the findings using a second method of piecewise linear specification. The results show that the non-linear relationship between the ownership of family CEOs and firm performance is more complicated than the often-documented inverted ''U'' shape from public firms. Meanwhile, the second largest owner with a high enough ownership stake can impose a positive moderating effect by mitigating potential agency problems caused by family CEOs.Keywords Family CEO Á The second largest owner Á Moderating effect Á Private family firms Á Agency theory Á Firm performance Limei Che and Pingying Zhang have contributed equally to this work. & Limei CheLimei.che@hbv.noPingying Zhang

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“…The private sector have more clearly defined property rights rather than the public sector, and thus, incentives for seeking profits by private owners which then leads to more effective management performance monitoring (Alchian 1965;McCormick and Meiners 1988). Specifically because a close linkage exists between the wealth of private controllers and the welfare of the firm, they focus more on cost minimization while maximization profits than governments (Che and Langli 2015).…”

Section: Type Of Ownermentioning

confidence: 99%

Corporate Governance Mechanisms, Ownership and Firm Value: Evidence from Listed Chinese Firms

Kong

Famba

Chituku-Dzimiro

et al. 2020

IJFS

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This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.

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Governance Structure and Firm Performance in Private Family Firms

Cited by 41 publications

References 92 publications

The Moderating Effect of Intellectual Capital on the Relationship Between Corporate Governance and Companies Performance in Pakistan

The Moderating Effect of Intellectual Capital on the Relationship Between Corporate Governance and Companies Performance in Pakistan

The impact of family CEO’s ownership and the moderating effect of the second largest owner in private family firms

Corporate Governance Mechanisms, Ownership and Firm Value: Evidence from Listed Chinese Firms

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