The Effect of Family Ownership and Control on Disclosure Policies of Public Firms

Posted: 14 Nov 2015 Last revised: 14 Sep 2019

See all articles by Daniele Macciocchi

Daniele Macciocchi

University of Miami Herbert Business School

Date Written: January 10, 2016

Abstract

This paper examines the effect of family ownership on firm voluntary disclosure and the associated capital market consequences. I use a randomly assigned family trait, the gender of the firstborn child of the firm’s family owner, as an instrumental variable and find that family ownership of a firm decreases its voluntary disclosure and stock liquidity. Results suggest that incentives to retain family ownership and control of a firm affect corporate disclosure policies, and exemplify why some firms are opaque despite the potential capital market benefits of improved disclosure. Robustness tests show that the negative effect of family ownership on firm voluntary disclosure holds across different firm generations, ages of the firstborn child, local economic development and cultural settings.

Keywords: Family ownership, voluntary disclosure, stock liquidity, growth opportunities

JEL Classification: G14, G32, M41

Suggested Citation

Macciocchi, Daniele, The Effect of Family Ownership and Control on Disclosure Policies of Public Firms (January 10, 2016). Available at SSRN: https://ssrn.com/abstract=2690857 or http://dx.doi.org/10.2139/ssrn.2690857

Daniele Macciocchi (Contact Author)

University of Miami Herbert Business School ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
United States

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