Linear Prices Equilibria and Nonexclusive Insurance Market
Family businesses are an important part of the world economy (Anderson and Reeb, 2003) and show significant differences in their corporate governance compared to non-family firms. Although displaying evident unique features, family firms have received relatively little attention as distinct from their equivalents in publicly held firms. Our study contributes to this growing research and investigates empirically the relationship between family shareholding and audit pricing. Using a sample of 3291 firm-year observations of major U.S. listed companies, for the period 2006- 2008, our results demonstrate that audit fees is negatively associated to family shareholding after taking into account unobservable firm effects, time-varying, industry effects and traditional control variables. The empirical results are robust to alternative family shareholding measures and estimation model specifications. Our results are consistent with the convergence-of-interests hypothesis suggesting that family firms face lower manager/shareholders agency costs. Auditors charge lower fees for family firms because of lower information asymmetry and risk as the controlling family is well informed about the firm and is better able to monitor managerial decisions.
|Date of creation:||01 Jan 2014|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 33 1 53 63 36 00
Web page: http://www.ipag.fr
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Martimort & Lars Stole, 2002.
"The Revelation and Delegation Principles in Common Agency Games,"
Econometric Society, vol. 70(4), pages 1659-1673, July.
- David Martimort & Lars Stole, 2001. "The Revelation and Delegation Principles in Common Agency Games," CESifo Working Paper Series 575, CESifo Group Munich.
- Charles M. Kahn & Dilip Mookherjee, 1996.
"Competition and Incentives with Non-Exclusive Contracts,"
0075, Boston University - Industry Studies Programme.
- Charles M. Kahn & Dilip Mookherjee, 1998. "Competition and Incentives with Nonexclusive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 443-465, Autumn.
- Kahn, C.M. & Mookherjee, D., 1996. "Competition and Incentives with Non-Exclusive Contracts," Papers 75, Boston University - Industry Studies Programme.
- Richard Arnott & Joseph Stiglitz, 1991. "Equilibrium in Competitive Insurance Markets with Moral Hazard," NBER Working Papers 3588, National Bureau of Economic Research, Inc.
- Andrea Attar & Arnold Chassagnon, 2006.
"On moral hazard and nonexclusive contracts,"
PSE Working Papers
- Bisin, A. & Guaitoli, D., 1998.
"Moral Hazard and Non-Exclusive Contracts,"
98-24, C.V. Starr Center for Applied Economics, New York University.
- Alberto Bisin & Danilo Guaitoli, 1998. "Moral hazard and non-exclusive contracts," Economics Working Papers 345, Department of Economics and Business, Universitat Pompeu Fabra.
- Bisin, Alberto & Guaitoli, Danilo, 1998. "Moral Hazard and Non-Exclusive Contracts," CEPR Discussion Papers 1987, C.E.P.R. Discussion Papers.
- Laurence Ales & Pricila Maziero, 2009.
"Adverse Selection and Non-Exclusive Contracts,"
GSIA Working Papers
2010-E61, Carnegie Mellon University, Tepper School of Business.
- Richard J. Arnott & Joseph E. Stiglitz, 1988.
"The Basic Analytics of Moral Hazard,"
NBER Working Papers
2484, National Bureau of Economic Research, Inc.
- Helpman, Elhanan & Laffont, Jean-Jacques, 1975. "On moral hazard in general equilibrium theory," Journal of Economic Theory, Elsevier, vol. 10(1), pages 8-23, February.
- Michael Peters, 1999.
"Common Agency and the Revelation Principle,"
peters-99-01, University of Toronto, Department of Economics.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
- Pauly, Mark V, 1974. "Overinsurance and Public Provision of Insurance: The Roles of Moral Hazard and Adverse Selection," The Quarterly Journal of Economics, MIT Press, vol. 88(1), pages 44-62, February.
- Christine A. Parlour & Uday Rajan, 2001. "Competition in Loan Contracts," American Economic Review, American Economic Association, vol. 91(5), pages 1311-1328, December.
When requesting a correction, please mention this item's handle: RePEc:ipg:wpaper:2014-042. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ingmar Schumacher)
If references are entirely missing, you can add them using this form.