Investment Distortions in Family Businesses. Agency theory or stewardship theory?

      Аннотация: Family business may have investment distortion problem because the entrenchment effect of large shareholdings and management opportunism through manipulation of earnings. However, stewardship theory may have an opposite view of family ownership. “The Investment Distortions in Family Businesses” provided the evidences that the impact of family control on firms investment behaviors could be explained by stewardship theory. This book discusses the relationship between family businesses and investment distortion for Taiwanese firms. An S-shaped relation between investment cash flow sensitivity and family ownership is found. Furthermore, when the CEO is also chairperson,it decreases investment distortion as in the stewardship theory. This book has important implications for corporate governance policy. First,family control could be an effective internal governance mechanism to mitigate investment distortions.Second,in countries without strong investor protection, ownership by a family may be helpful. Third, CEO duality may work as a mechanism to strengthen the stewardship attitude of managers.

Ключевые слова: corporate governance, Family Business, CEO Duality, Investment-Cash Flow Sensitivity