Multiple Large Shareholders and Corporate Risk‐Taking: Evidence from French Family Firms

49 Pages Posted: 2 Sep 2016

See all articles by Sabri Boubaker

Sabri Boubaker

University Paris-Est Créteil (UPEC) - Institut de Recherche en Gestion

Pascal Nguyen

Neoma Business School; University of Technology Sydney (UTS); Financial Research Network (FIRN)

Wael Rouatbi

Montpellier Business School; Institut de Recherche en Gestion (Université Paris Est Créteil)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2016

Abstract

We investigate the role of multiple large shareholders (MLS) in corporate risk‐taking. Using a sample of publicly listed French family firms over the period 2003−2012, we show that the presence, number and voting power of MLS are associated with higher risk‐taking. Our results suggest that MLS help restrain the propensity of family owners to undertake low‐risk investments. This effect is much stronger in firms that are more susceptible to agency conflicts. The results highlight the important governance role played by MLS in family firms and may explain why MLS are associated with higher firm performance.

Keywords: risk‐taking, ownership structure, family firms, private benefits of control, contestability, corporate governance

Suggested Citation

Boubaker, Sabri and Nguyen, Pascal and Rouatbi, Wael, Multiple Large Shareholders and Corporate Risk‐Taking: Evidence from French Family Firms (September 2016). European Financial Management, Vol. 22, Issue 4, pp. 697-745, 2016. Available at SSRN: https://ssrn.com/abstract=2833622 or http://dx.doi.org/10.1111/eufm.12086

Sabri Boubaker (Contact Author)

University Paris-Est Créteil (UPEC) - Institut de Recherche en Gestion ( email )

61 Avenue du General de Gaulle
94010 Creteil
France

HOME PAGE: http://www.irg.u-pec.fr/enseignant.php?num=58

Pascal Nguyen

Neoma Business School ( email )

1 Rue du Maréchal Juin
Mont Saint Aignan Cedex, 76825
France
+33 2 3282 5774 (Phone)

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
+61 2 9514 7718 (Phone)
+61 2 9514 7711 (Fax)

HOME PAGE: http://datasearch.uts.edu.au/business/finance/staff/StaffDetails.cfm?UnitStaffId=4415

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Wael Rouatbi

Montpellier Business School ( email )

2300 Avenue des Moulins
Montpellier, 34080
France

Institut de Recherche en Gestion (Université Paris Est Créteil) ( email )

80 Avenue du General de Gaulle
Creteil, 94000
France

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