Family Firms and Financial Analyst Activity

Pacific Basin Finance Journal (2019), Volume 57, Octobre 2019, 101005

Working Paper SES no 491

44 Pages Posted: 19 Dec 2017 Last revised: 23 Apr 2021

See all articles by Nicolas Eugster

Nicolas Eugster

University of Queensland - Business School

Date Written: February 10, 2018

Abstract

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

Eugster, Nicolas, Family Firms and Financial Analyst Activity (February 10, 2018). Pacific Basin Finance Journal (2019), Volume 57, Octobre 2019, 101005, Working Paper SES no 491, Available at SSRN: https://ssrn.com/abstract=3087838 or http://dx.doi.org/10.2139/ssrn.3087838

Nicolas Eugster (Contact Author)

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

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