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Family firms and financial analyst activity

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  • Eugster, Nicolas

Abstract

This paper examines the relationship between ownership structure, analyst coverage, and forecast error for the entire population of non-financial companies listed on the Swiss Exchange for the period 2003–2013. The results show a negative association between concentrated ownership and analyst coverage for both family firms and firms held by a nonfamily blockholder. Furthermore, analysts' forecasts are shown to be more accurate for family firms than for other firms, suggesting a better information environment within these companies. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.

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  • Eugster, Nicolas, 2019. "Family firms and financial analyst activity," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:pacfin:v:57:y:2019:i:c:s0927538x17305760
    DOI: 10.1016/j.pacfin.2018.03.002
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    Cited by:

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    More about this item

    Keywords

    Ownership structure; Concentrated ownership; Family firms; Nonfamily blockholder; Widely held firms; Analyst coverage; Forecast error; Information environment;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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