Organizational form and agency problems
Author(s)
Advisor
Günsur, A. Başak TanyeriDate
2022-12Publisher
Bilkent University
Language
English
Type
ThesisItem Usage Stats
25
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Abstract
This dissertation comprises three essays about agency problems in family firms. The
second chapter examines how the protection of shareholder rights affects the pricing
of family firms. We measure investor reaction to 132 deaths in 109 publicly traded
family firms operating in 24 countries. Investor reaction to a death in the family,
measured using abnormal stock returns, averages 0.58 percent and is significant.
Investors perceive the death to be a value-enhancing event with the potential to dilute
family control. The positive investor reaction is amplified in countries and periods with
weaker protection of shareholder rights. The third chapter investigates how the
gender perceptions of investors may shape their valuation of family firms. Children
from multiple marriages could increase potential conflicts. Investor reaction decrease
with the interaction of the number of children and the number of marriages the deceased had. Furthermore investors perceive male, but not female, progeny as
potential instigators of unrest. The fourth chapter investigates whether family or nonfamily
firms are more likely targets of shareholder activism. Shareholder activism
aims to limit agency conflicts between insiders and outsider shareholders. We
examine the shareholder activism targeting the 2,000 largest nonutility and
nonfinancial firms traded in the United States. We measure shareholder activism
with Schedule 13D forms filed to change or influence the control. Results indicate
that family firms are more likely targets of shareholder activism than non-family
firms. Activist shareholders seem to focus on principal-principal agency problems in
family firms and principal-agent agency problems in non-family firms.