Family Control and the Economic Impact of Corporate Entrepreneurship-The Cases of Corporate Innovation and Venturing

• Main Authors: Ying-Jiuan Wong, 翁鶯娟
• Other Authors: Wann-Yih Wu
• Format: Others
• Language: en_US
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/36526958008406030961

博士 === 國立成功大學 === 企業管理學系碩博士班 === 96 === This study investigates the relationship between family-controlled business and economic impact of corporate entrepreneurship (CE). Prior studies suggested that family-controlled business might involve both costs and benefits, and the results so far have been inconclusive. With a large proportion of listed corporations has a family-controlled ownership structure, we found that such businesses in Taiwan experienced significantly more negative stock market reactions to CE announcements. The empirical results further indicated that the divergence of cash flow and voting rights was strongly and negatively associated with announcement-period market reactions, suggesting that market participants may perceive family-controlled businesses as using CE activities to pursue self-interest at the expense of other shareholders. We also found that the participation of institutional ownership mitigated the negative influence of family control. Moreover, the evidence of post-announcement operating performance strengthened the finding that family control did indeed harm the value creation of CE announcements. The conclusions were robust under various measures of family control, and remained valid after controlling other influential factors to CE announcements.