Multi-family cofounders and firm value

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The paper shows that higher valuation of family firms occurs only for family firms founded by several non-related people (multi-family cofounding firms). The evidence suggests that having at least two unrelated cofounders involved in management reduces agency problems through mutual monitoring. Relative to single-family founding firms, multi-family cofounding firms are more likely to force out founders and less likely to allow descendants to take control after founders retire.

Keywords: Family Firms, Founder, Corporate Governance

JEL Classification: G32

Received: 16.07.2019
Accepted: 23.07.2019

How to cite: Lim, S.-Y. (2019). Multi-family cofounders and firm value. In S. Esposito De Falco, F. Alvino, & A. Kostyuk (Eds.), New challenges in corporate governance: Theory and practice (pp. 257-271).