Family Firms and Financial Analyst Activity
Pacific Basin Finance Journal, 2018
44 Pages Posted: 19 Dec 2017 Last revised: 30 Apr 2018
Date Written: February 10, 2018
This paper examines the relationship between ownership structure, analyst coverage, and forecast error for the entire population of non-financial companies listed on the Swiss Exchange for the period 2003-2013. The results show a negative association between concentrated ownership and analyst coverage for both family firms and firms held by a nonfamily blockholder. Furthermore, analysts’ forecasts are shown to be more accurate for family firms than for other firms, suggesting a better information environment within these companies. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.
Keywords: ownership structure, concentrated ownership, family firms, nonfamily blockholder, widely held firms, analyst coverage, forecast error, information environment
JEL Classification: G32, G34
Suggested Citation: Suggested Citation