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Governance Structure And Performance Of Private Family Firms, Tarun Mukherjee, Vighneshwara Swami, Wei Wang
Governance Structure And Performance Of Private Family Firms, Tarun Mukherjee, Vighneshwara Swami, Wei Wang
Business Faculty Publications
A debate exists on the issue of whether a governance system is value additive or even necessary for a privately-held firm. One side of the debate suggests that, since agency problems do not exist in a small private firm, it does not need a costly governance system. The other side argues that a private firm indeed faces agency costs in the form of altruism and, therefore, could extract net gains from a governance system. In this paper, we empirically investigate whether a good governance system crates or destroys value of private family firms. We first demonstrate that a multifamily firm …