Not logged in.
Quick Search - Contribution
Contribution Details
| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | Does family-control lead to a higher market valuation of listed companies in Switzerland? |
| Organization Unit | |
| Authors |
|
| Supervisors |
|
| Language |
|
| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 28 |
| Date | 2020 |
| Abstract Text | Listed companies in Switzerland have big differences in their shareholding structure; some companies have a controlling shareholder such as a family, a private financial or juridical person, whereas others have widely dispersed ownership. This paper examines whether companies that have a family as controlling shareholder outperform their peer listed companies in terms of market and accounting performance. To investigate the effects of family-control on a firm and its performance, various simple OLS regressions of ownership and control variables on performance are run. The results show that family-controlled firms outperform their peers in terms of Return on Assets. The capability and commitment of a family to oversee the management seem to reduce agency problem I; the problem coming from the separation of ownership and control in a company. However, the stocks of family-controlled firms show a discount on market valuation in terms of Tobin’s q. Minority shareholders seem to discount the presence of a controlling shareholder in fear of agency problem II; the problem that major shareholders may extract private benefits and act in a way that is not in the interests of minority shareholders. In conclusion, even though family-control does not lead to a higher, but lower market valuation, my paper shows that family ownership is an effective organizational structure as it seems to reduce agency problem I whereas agency problem II, contrary to the fears of minority shareholders, at most plays a minor role in family-controlled firms. |
| Export |
BibTeX
|