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Family Control and Ownership Monitoring in Family-Controlled Firms in Japan

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Listed:
  • Toru Yoshikawa
  • Abdul A. Rasheed

Abstract

This paper focuses on a type of firms that have been traditionally neglected in both family business and governance research, namely, family-controlled, publicly-listed firms. Although principal-agent conflicts may be less prevalent in such firms, family control can potentially give rise to principal-principal conflicts, leading to expropriation of the wealth of minority owners by family owners. Superior firm performance and the willingness to distribute the profits through dividend payments would suggest the absence of such expropriation. Based on a sample of 210 OTC firms in Japan, we examined the relationships between family control and dividend payouts and profitability. Our results indicate that family control was positively related to dividend payouts. Further, we found that while foreign ownership interacted with family control to reduce dividend payouts and increase profitability, bank ownership did not have such an effect. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

Suggested Citation

  • Toru Yoshikawa & Abdul A. Rasheed, 2010. "Family Control and Ownership Monitoring in Family-Controlled Firms in Japan," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 274-295, March.
  • Handle: RePEc:bla:jomstd:v:47:y:2010:i:2:p:274-295
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    References listed on IDEAS

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    Cited by:

    1. Sanchez-Bueno, Maria J. & Usero, Belen, 2014. "How may the nature of family firms explain the decisions concerning international diversification?," Journal of Business Research, Elsevier, vol. 67(7), pages 1311-1320.
    2. Fumitoshi Mizutani & Eri Nakamura, 2014. "Managerial incentive, organizational slack, and performance: empirical analysis of Japanese firms’ behavior," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(1), pages 245-284, February.
    3. Cui, Lin & Meyer, Klaus E. & Hu, Helen Wei, 2014. "What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms," Journal of World Business, Elsevier, vol. 49(4), pages 488-501.
    4. Yee-Chy Tseng & Ching-Ping Chang & Ruey-Dang Chang & Hao-Yun Liao, 2012. "The Impact of Bankers on the Board on Corporate Dividend Policy: Evidence from an Emerging Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(0), pages 192-212, January.
    5. Isakov, Dušan & Weisskopf, Jean-Philippe, 2015. "Pay-out policies in founding family firms," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 330-344.
    6. Ghulam Abid & Binish Khan & Zeeshan Rafiq & Alia Ahmed, 2014. "Theoretical Perspectives of Corporate Governance," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 3(4), pages 166-175, December.
    7. Yee-Chy Tseng & Ching-Ping Chang & Ruey-Dang Chang & Hao-Yun Liao, 2012. "The Impact of Bankers on the Board on Corporate Dividend Policy: Evidence from an Emerging Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(0), pages 192-212, January.
    8. Mulyani, Evy & Singh, Harminder & Mishra, Sagarika, 2016. "Dividends, leverage, and family ownership in the emerging Indonesian market," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 43(C), pages 16-29.
    9. Basco, Rodrigo, 2013. "The family's effect on family firm performance: A model testing the demographic and essence approaches," Journal of Family Business Strategy, Elsevier, vol. 4(1), pages 42-66.
    10. Di Cai & Jin-hui Luo & Di-fang Wan, 2012. "Family CEOs: Do they benefit firm performance in China?," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 923-947, December.
    11. repec:eee:fambus:v:8:y:2017:i:3:p:123-136 is not listed on IDEAS
    12. Webb, Justin W. & Ketchen Jr., David J. & Ireland, R. Duane, 2010. "Strategic entrepreneurship within family-controlled firms: Opportunities and challenges," Journal of Family Business Strategy, Elsevier, vol. 1(2), pages 67-77, June.
    13. repec:eee:ecolec:v:138:y:2017:i:c:p:126-138 is not listed on IDEAS
    14. Anneleen Michiels & Wim Voordeckers & Nadine Lybaert & Tensie Steijvers, 2015. "Dividends and family governance practices in private family firms," Small Business Economics, Springer, vol. 44(2), pages 299-314, February.
    15. William S. Schulze & Eric R. Gedajlovic, 2010. "Whither Family Business?," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 191-204, March.
    16. Barros, Ismael & Hernangómez, Juan & Martin-Cruz, Natalia, 2016. "A theoretical model of strategic management of family firms. A dynamic capabilities approach," Journal of Family Business Strategy, Elsevier, vol. 7(3), pages 149-159.

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