Publication Type

Journal Article

Publication Date

9-2014

Abstract

This article reviews family firm studies in the finance and accounting literature, primarily those conducted using data from the United States and China. Family owners have unique features such as concentrated ownership, long investment horizon, and reputation concerns. Given the distinguishing features of family ownership and control, family firms face unique agency conflicts. We discuss the agency problems in family firms and review the findings of recent family firm studies. We call for more research to understand the unique family effects and encourage more research on Chinese family firms. Part I of the article discusses the fundaments of family firms: the prevalence of and the agency conflicts within family firms. Part II summarizes the findings of recent U.S. family firm studies. It reviews the evidence on the family firm premium (how, which, and when family firms are associated with a valuation premium), the manifestation of the agency conflict between majority and minority shareholders in family firms, earnings quality and corporate disclosure, and the determinants of family ownership and control. Part III discusses the prevalence and characteristics of Chinese family firms and reviews the findings of related studies. The article concludes with some suggestions for future research.

Keywords

Family firms, Ownership structure, Agency problems, Controlling owners, Minority owners

Discipline

Accounting | Corporate Finance | Entrepreneurial and Small Business Operations

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

China Journal of Accounting Research

Volume

7

Issue

3

First Page

149

Last Page

163

ISSN

1755-3091

Identifier

10.1016/j.cjar.2014.03.002

Publisher

Elsevier

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.1016/j.cjar.2014.03.002

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