Online Appendix for “Family Feud: Succession Tournaments and Risk-taking in Family Firms”

21 Pages Posted: 14 May 2022

See all articles by Jongsub Lee

Jongsub Lee

Seoul National University; University of Florida - Warrington College of Business Administration

Hojong Shin

California State University, Long Beach

Hayong Yun

Michigan State University - Department of Finance

Date Written: April 25, 2022

Abstract

This is the online appendix for 'Family Feud: Succession Tournaments and Risk-taking in Family Firms' available at http://ssrn.com/abstract=2703571.

We identify succession as a novel determinant of risk-taking in family firms. We find significantly higher risk-taking (M&A and cash flow volatility) and lower operating efficiency in firms controlled by families with multiple sons during the pre- rather than the postsuccession period compared to family firms with one or no sons. Presuccession risk-taking by sons decreases the following inheritance law amendments that require sharing of wealth among heirs, bolstering the causal interpretation of our findings. An infusion of outside talent via daughters’ marriages also alleviates the relative rank-seeking behaviors of sons during succession tournaments.

Keywords: uccession tournaments, business group, risk shifting, family composition, sons, daughters, sons-in-law, sudden death of a group chairman, inheritance law

JEL Classification: G30

Suggested Citation

Lee, Jongsub and Shin, Hojong and Yun, Hayong, Online Appendix for “Family Feud: Succession Tournaments and Risk-taking in Family Firms” (April 25, 2022). Available at SSRN: https://ssrn.com/abstract=4091019 or http://dx.doi.org/10.2139/ssrn.4091019

Jongsub Lee

Seoul National University ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

University of Florida - Warrington College of Business Administration ( email )

Department of Finance Insurance & Real Estate
P.O. Box 117168
Gainesville, FL 32611-7168
United States
352-273-4966 (Phone)
352-392-0301 (Fax)

Hojong Shin (Contact Author)

California State University, Long Beach ( email )

1250 Bellflower Boulevard
Long Beach, CA 90840
United States
562.985.7996 (Phone)

Hayong Yun

Michigan State University - Department of Finance ( email )

667 N Shaw Lane, Room 339
East Lansing, MI 48824-1122
United States
517-884-0549 (Phone)

HOME PAGE: http://https://sites.google.com/view/hayongyun/

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