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Research On The Contract Governance Of Family Listed Company

Posted on:2009-07-08Degree:MasterType:Thesis
Country:ChinaCandidate:J Y WuFull Text:PDF
GTID:2189360272477465Subject:Accounting
Abstract/Summary:PDF Full Text Request
Family firms play an important role in the development of the economy of both developed and developing countries. Most of the private companies appeared after the 1980s were family companies. They are now become an important part of the national economy of our country, and some of them become world famous multinational companies. With the development of the household companies, the disadvantages of the household form are also emerging. Familial listed companies have the traditional characteristics of family that bring dual agency conflicts. The contracts of family companies have the essence of informal and the altruism will debase the value of company. So the questions are: does the governance of familial companies have efficiency and what is the most efficient governance structure.Based on theories of contract governance and corporate governance, the article makes a theoretic and pragmatic study on the relation between contract governance and firm value of familial listed companies. Through this, making clear the contract governance structure of the family company then questing for the factors which have relationship with the firm value and in which extent they do. The article first summarizes the development of the family companies over the world, analyses the development and actuality of the familial companies in our country, and describes the questions and actualities in the process of contractual governance. On the base of the informal essence of the familial company, the article discusses the characteristics of the familial contracts. Then , the article analyses the importance of contract governance to the family companies. The article emphatically discusses that the altruism has dual influence on the firm value. Altruism will have different effect on agency costs at the different stage of the family company.The article chooses 96 familial listed companies out of Shanghai and Shenzhen stock exchanges to explore the relationship between variables of contract governance and the firm value. Through the analysis of pertinence, the result shows that the variables of family management participation and Tobin Q have the relationship of reverse U. It means that familial governance will promote the firm value when the company is at the initial stage. But when the company develops to a certain state, the conflicts will badly affect the firm value. So it is essential for family firms to improve their contract governance structure. At last the article suggests a three poles model for familial contract governance. The articl also suggest that family companies should reduce the rate of family management, release some ownership, train the successor and so on. All this will promote the family firms transform into a firm with professional management.
Keywords/Search Tags:family control, contract governance, altruism, firm value
PDF Full Text Request
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