Long-Term Orientation In Family And Non-Family Firms: A Bayesian Analysis
AbstractA stronger long-term orientation is considered a competitive advantage of family firms relative to non-family firms. In this study, we use panel data of U.S. firms and analyze this proposition. Our findings are surprising. Only in when the family is involved in the management of the firm is the firm found to invest more in long-term projects relative to a non-family firm. We also find that investment in long-term projects in family firms is determined less by cash flow variations than for non-family firms. Managerial implications of our findings are discussed. Our hypotheses are tested using Bayesian methods.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2007-059.
Length: 46 pages
Date of creation: Oct 2007
Date of revision:
Family Firm; Long-term Orientation; Myopia; Bayesian Analysis; Agency Theory; Stewardship Theory; Investment Policy;
Find related papers by JEL classification:
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
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