Earnings Quality in Acquired and Non-Acquired Family Firms: A Socioemotional Wealth Perspective

Family Business Review, Forthcoming

29 Pages Posted: 18 Apr 2013  

Federica Pazzaglia

University College Dublin

Stefano Mengoli

University of Bologna - Department of Management

Elena Sapienza

University of Padua - Department of Economics "M.Fanno"

Date Written: April 17, 2013

Abstract

We develop a socioemotional wealth (SEW) explanation for the differences in earnings quality between family firms. We argue that the process by which families obtain ownership of firms is a key contingency affecting earnings quality. Specifically, firms acquired by families through market transactions display lower earnings quality due to lower identification of family owners relative to firms still owned by the families which created them. Acquired family firms benefit with respect to their earnings quality from having a nonfamily CEO while non-acquired family firms benefit from having a family CEO.

Keywords: Identity, earnings quality, acquired family firms, non-acquired family firms, socioemotional wealth

JEL Classification: G32, M14, M41, M43

Suggested Citation

Pazzaglia, Federica and Mengoli, Stefano and Sapienza, Elena, Earnings Quality in Acquired and Non-Acquired Family Firms: A Socioemotional Wealth Perspective (April 17, 2013). Family Business Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2252910

Federica Pazzaglia (Contact Author)

University College Dublin ( email )

Belfield, Dublin 4 4
Ireland

Stefano Mengoli

University of Bologna - Department of Management ( email )

Via Capo di Lucca, 24
http://stefanomengoli.weebly.com/
Bologna, Bologna 40132
Italy

Elena Sapienza

University of Padua - Department of Economics "M.Fanno" ( email )

Via del Santo 33
Padua, 35132
Italy
39 049 8274009 (Phone)

Paper statistics

Downloads
153
Rank
158,580
Abstract Views
539