Family Companies

Dear Colleagues,

The purpose of this Special Issue is to catalyse research based on agency theory in order to deepen our understanding of family companies. There is ample evidence that supports the notion that the corporate governance of family companies substantially differs from the corporate governance of non-family companies. In particular, non-family companies have greater domination of Type 1 versus Type 2 agency costs of equity. The opposite is true for family companies (Ali, Chen and Radhakrishnan, 2007).

However, family companies are not homogeneous, with respect to corporate governance characteristics, agency mechanisms and outputs. The extant literature suggests that corporate governance effectiveness differs systematically, according to the extent to which professional managers are employed as executives (Chen, Cheng and Dai, 2013), and whether the company has progressed from the founding generation of the controlling family (Pérez-Gonzáles, 2006). Furthermore, evidence from Southeast Asia identifies systematic differences according to whether the family company is a Nanyang company (a company managed by ethnic Chinese entrepreneurs, strongly influenced by Confucian tenets) (Sinnadurai, 2018). Understanding these differences is conducive to the enhanced well-being of all stakeholders.

Every country across the world has a different institutional environment, and hence the potential to make a valuable contribution. Researchers are invited to submit papers that impart perspectives on suitable modes for categorising types of family companies. Empirical, analytical and discussion papers are welcome.

References

Ali, Ashiq, Tai-Yuan Chen, T-Y., and Suresh Radhakrishnan, S. 2007. Corporate disclosures by family firms. Journal of Accounting and Economics 44: 238-286.  http://dx.doi.org/10.1016/j.jacceco.2007.01.006

Chen, Xia, Qiang Cheng, & Zhonglan Dai. 2013.  Family ownership and CEO turnovers.  Contemporary Accounting Research 30: 1,166-1,190.  http://dx.doi.org/ 10.1111/j.1911-3846.2012.01185.x

Pérez-Gonzáles, Francisco. 2006.  Inherited control and firm performance.  American Economic Review 96: 1,559-1,588.  DOI: 10.1257/aer.96.5.1559.

Sinnadurai, Philip.  2018. A vision for Malaysian and Other ASEAN researchers to contribute to international agency theory-based literature.  Asian Journal of Business and Accounting 11: 1-54.  https://doi.org/10.22452/ajba.vol11no2.1

Dr. Philip Sinnadurai
Guest Editor

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• family companies
• agency costs of equity
• corporate governance