We study the impact of succession tournaments on risk-taking in family firms. More sons (less daughters) in controlling families are associated with higher income volatility and lower performance – especially, in opaque private firms with pyramidal ownership structure. Contestants exhibit managerial myopia such as higher dividend payouts and less R&D investments. Overall, succession tournaments induce risk-taking and managerial myopia among sons, but positive externalities through marriages (sons-in-law) mitigate these concerns. Using the sudden death of a chairman as an exogenous shock to a succession tournament, we confirm a causal link between increased competition among succession contestants and corporate risktaking.
JEL Codes: G30;
Keywords: succession tournaments, business group, risk shifting, family composition, sons, daughters, sons-in-law.
학회소식
[2016년 제 4차] Family Feud: Succession Tournaments and Risk-taking
작성자 : 관리자
조회수 : 1091
게시일 :
2016-12-21
