Do Family Firms Provide More or Less Voluntary Disclosure?

54 Pages Posted: 14 Jul 2007 Last revised: 9 Apr 2013

See all articles by Shuping Chen

Shuping Chen

University of Texas at Austin - Red McCombs School of Business

Xia Chen

Singapore Management University

Qiang Cheng

Singapore Management University

Multiple version iconThere are 2 versions of this paper

Date Written: September 2007

Abstract

We examine the voluntary disclosure practices of family firms. We find that, compared to non-family firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates non-family insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for founding family's presence in the firm leads to similar results.

Keywords: founding family, equity ownership, voluntary disclosure, earnings forecasts, earnings warnings

JEL Classification: D82, G14, G32, G34, K22, M41, M45

Suggested Citation

Chen, Shuping and Chen, Xia and Cheng, Qiang, Do Family Firms Provide More or Less Voluntary Disclosure? (September 2007). Available at SSRN: https://ssrn.com/abstract=999785 or http://dx.doi.org/10.2139/ssrn.999785

Shuping Chen (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States
521.471.5328 (Phone)

Xia Chen

Singapore Management University ( email )

60 Stamford Rd.
Singapore 178900
Singapore

Qiang Cheng

Singapore Management University ( email )

60 Stamford Road
Singapore, 178900
Singapore

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