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- Publisher Website: 10.1016/j.jcorpfin.2018.09.004
- Scopus: eid_2-s2.0-85054192163
- WOS: WOS:000528038800011
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Article: The impact of ownership transferability on family firm governance and performance: The case of family trusts
Title | The impact of ownership transferability on family firm governance and performance: The case of family trusts |
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Authors | |
Keywords | Family trust Ownership structure Ownership transferability Family firm Firm governance |
Issue Date | 2020 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin |
Citation | Journal of Corporate Finance, 2020, v. 61, article no. 101409 How to Cite? |
Abstract | Ownership structure plays a critical role in the incentives and behaviors of business organizations. The literature has focused on the effects of firm ownership dispersion across managers and investors. We extend the literature by examining the roles of ownership structure within a controlling family. Specifically, we focus on the family trust structure, which is a popular vehicle for holding family ownership around the world. The trust structure typically locks controlling ownership within a family for a very long period. Although it ensures family control, the share transfer restriction may induce family shirking problems, make family conflicts difficult to resolve, and distort firm decisions. Based on a sample of publicly traded family firms in Hong Kong, we report that trust-controlled firms that are more susceptible to these problems tend to pay higher dividends, invest less in the long term, and experience worse performance. The costs of using a trust structure are more significant when the family stakes have been locked inside the trust for a longer period and when a larger amount of family ownership is held by the trust. |
Persistent Identifier | http://hdl.handle.net/10722/278999 |
ISSN | 2023 Impact Factor: 7.2 2023 SCImago Journal Rankings: 3.182 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Fan, JPH | - |
dc.contributor.author | Leung, WSC | - |
dc.date.accessioned | 2019-10-21T02:17:46Z | - |
dc.date.available | 2019-10-21T02:17:46Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | Journal of Corporate Finance, 2020, v. 61, article no. 101409 | - |
dc.identifier.issn | 0929-1199 | - |
dc.identifier.uri | http://hdl.handle.net/10722/278999 | - |
dc.description.abstract | Ownership structure plays a critical role in the incentives and behaviors of business organizations. The literature has focused on the effects of firm ownership dispersion across managers and investors. We extend the literature by examining the roles of ownership structure within a controlling family. Specifically, we focus on the family trust structure, which is a popular vehicle for holding family ownership around the world. The trust structure typically locks controlling ownership within a family for a very long period. Although it ensures family control, the share transfer restriction may induce family shirking problems, make family conflicts difficult to resolve, and distort firm decisions. Based on a sample of publicly traded family firms in Hong Kong, we report that trust-controlled firms that are more susceptible to these problems tend to pay higher dividends, invest less in the long term, and experience worse performance. The costs of using a trust structure are more significant when the family stakes have been locked inside the trust for a longer period and when a larger amount of family ownership is held by the trust. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin | - |
dc.relation.ispartof | Journal of Corporate Finance | - |
dc.subject | Family trust | - |
dc.subject | Ownership structure | - |
dc.subject | Ownership transferability | - |
dc.subject | Family firm | - |
dc.subject | Firm governance | - |
dc.title | The impact of ownership transferability on family firm governance and performance: The case of family trusts | - |
dc.type | Article | - |
dc.identifier.email | Leung, WSC: leungwin@hku.hk | - |
dc.identifier.authority | Leung, WSC=rp01767 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jcorpfin.2018.09.004 | - |
dc.identifier.scopus | eid_2-s2.0-85054192163 | - |
dc.identifier.hkuros | 308010 | - |
dc.identifier.volume | Forthcoming | - |
dc.identifier.volume | 61 | - |
dc.identifier.spage | article no. 101409 | - |
dc.identifier.epage | article no. 101409 | - |
dc.identifier.isi | WOS:000528038800011 | - |
dc.publisher.place | Netherlands | - |
dc.identifier.issnl | 0929-1199 | - |