Family values: Ownership structure, performance and capital structure of Canadian firms
AbstractThis study examines how family ownership affects the performance and capital structure of 613 Canadian firms from 1998 to 2005. In particular, we distinguish the effect of family ownership from the use of control-enhancing mechanisms. We find that freestanding family owned firms with a single share class have similar market performance than other firms based on Tobin's q ratios, superior accounting performance based on ROA, and higher financial leverage based on debt-to-total assets. By contrast, family owned firms that use dual-class shares have valuations that are lower by 17% on average relative to widely held firms, despite having similar ROA and financial leverage.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Banking & Finance.
Volume (Year): 32 (2008)
Issue (Month): 11 (November)
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Web page: http://www.elsevier.com/locate/jbf
Ownership structure Dual-class shares Pyramids Firm performance Capital structure Canada;
Other versions of this item:
- Michael R. King & Eric Santor, 2007. "Family Values: Ownership Structure, Performance and Capital Structure of Canadian Firms," Working Papers 07-40, Bank of Canada.
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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