Are Family Firms Better Performers During the Financial Crisis? New Insights from the S&P 500 Firms

35 Pages Posted: 18 Jan 2013 Last revised: 28 Jul 2018

See all articles by Haoyong Zhou

Haoyong Zhou

Keele Management School

Yanbo Wang

Sungkyunkwan University (SKK) Graduate School of Business

Fan He

Central Connecticut State University

Date Written: July 18, 2012

Abstract

This paper provides new evidence examining whether family firms were better performers during the global financial crisis (2008-2010). Using the dataset of the S&P 500 non-financial firms during the period of 2006-2010, we find that family firms outperform non-family firms during the crisis. Moreover, it is the sub-group of family firms, founder firms, i.e. those where the founder is present that contributes to the outperformance. We also find that during the global financial crisis, founder firms invest significantly less and have better access to the credit market than non-family firms. Our analysis suggests that the superior performance of founder firms is largely caused by less incentive to over-invest in order to boost short-term earnings during the crisis.

Keywords: family firms, performance, founder, corporate governance, financial crisis

JEL Classification: G01, G14, G32

Suggested Citation

Zhou, Haoyong and Wang, Yanbo and He, Fan, Are Family Firms Better Performers During the Financial Crisis? New Insights from the S&P 500 Firms (July 18, 2012). Asian Finance Association (AsFA) 2013 Conference. Available at SSRN: https://ssrn.com/abstract=2201863 or http://dx.doi.org/10.2139/ssrn.2201863

Haoyong Zhou (Contact Author)

Keele Management School ( email )

Darwin Building
Staffordshire, ST5 5BG
United Kingdom

Yanbo Wang

Sungkyunkwan University (SKK) Graduate School of Business ( email )

53 Myeongnyun-dong 3-ga Jongno-ju
Guro-gu
Seoul, 110-745
Korea, Republic of (South Korea)

Fan He

Central Connecticut State University ( email )

1615 Stanley Street
New Britian, CT 06050
United States

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