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Performance of Family Firms During the Global Financial Crisis: Does Governance Matter?

24 Pages Posted: 2 Jan 2012 Last revised: 28 Feb 2012

Husam Alderman

School of Business, Bond Univeristy

Keith Duncan

Bond University - Accounting

Simone Kelly

Bond University - Finance

Ray McNamara

Bond University - School of Business

Date Written: December 25, 2011

Abstract

We investigate whether better corporate governance impacts the performance of family versus non-family firms during the Global Financial Crisis (GFC). If good governance matters then its impact should be amplified during times of exogenous financial shocks. Furthermore the impact of governance will be more pronounced for family firms as family firms are more resilient, have greater access to survival capital and have a longer term decision making focus. We find that the value of family firms is more sensitive to book value than earnings changes whereas better governance results in a higher earnings relationship with value during the GFC. We also find better governance, irrespective of whether the firm is family or non-family, is associated with better accounting and market performance during the GFC.

Keywords: Corporate governance, family firm, performance

JEL Classification: M40, M41

Suggested Citation

Alderman, Husam and Duncan, Keith and Kelly, Simone and McNamara, Ray, Performance of Family Firms During the Global Financial Crisis: Does Governance Matter? (December 25, 2011). 2012 Financial Markets & Corporate Governance Conference. Available at SSRN: https://ssrn.com/abstract=1976789 or http://dx.doi.org/10.2139/ssrn.1976789

Husam Alderman

School of Business, Bond Univeristy ( email )

Gold Coast, QLD 4229
Australia

Keith R. Duncan (Contact Author)

Bond University - Accounting ( email )

Gold Coast, QLD 4229
Australia
07 55952238 (Phone)

Simone M. Kelly

Bond University - Finance ( email )

Gold Coast, QLD 4229
Australia

Ray McNamara

Bond University - School of Business ( email )

Gold Coast, QLD 4229
Australia
+61 7 55952219 (Phone)
+61 7 55951160 (Fax)

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