The Effect of Family Ownership on Corporate Hedging: The Case of Thailand

18 Pages Posted: 15 Sep 2016

See all articles by Sachapon Tungsong

Sachapon Tungsong

Thammasat University - Thammasat Business School

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Date Written: September 14, 2016

Abstract

We explore how corporate hedging decisions are affected by family ownership and control in Thailand. One crucial advantage of investigating this issue in Thailand is that hedging instruments became available only recently, long after families established their presence in the firm. Thus, endogneity is much less likely. The evidence shows that family ownership by itself does not have a significant impact on the firm’s propensity to hedge. However, when family members have a presence on the board of directors, the firm is significantly more likely to engage in hedging activities. Furthermore, we find that the presence of institutional blockholders also increases the likelihood of hedging significantly. Our study is the first to examine the impact of family ownership and control on corporate hedging behavior in an emerging market.

Keywords: Family Ownership, Family Control, Hedging, Risk Management, Emerging Markets

JEL Classification: G32, G34

Suggested Citation

Tungsong, Sachapon and Jiraporn, Pornsit, The Effect of Family Ownership on Corporate Hedging: The Case of Thailand (September 14, 2016). Available at SSRN: https://ssrn.com/abstract=2839090 or http://dx.doi.org/10.2139/ssrn.2839090

Sachapon Tungsong

Thammasat University - Thammasat Business School ( email )

2 Prachan Road
Pra Nakorn
Bangkok, Bangkok 10200
Thailand

Pornsit Jiraporn (Contact Author)

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

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