Informativeness of accounting earnings in family firms
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Published
18-09-2018
Carolina Bona Sánchez
Jerónimo Pérez Alemán
Domingo Santana Martín
Abstract
This work examines the relationship between the family control and informativeness of accounting earnings in listed non-financial Spanish companies between 1997 and 2003. The results reveal a negative relationship between the family nature of the controlling shareholder and the credibility of accounting information. Moreover, as the level of voting rights in the hands of the family ultimate owner increases, the informativeness of earnings decreases. Only in family firms where the CEO is hired, the family nature affects positively on the informativeness of accounting earnings.
How to Cite
Bona Sánchez, C., Pérez Alemán, J., & Santana Martín, D. (2018). Informativeness of accounting earnings in family firms. Cuadernos De Gestión, 9(2), 17–30. https://doi.org/10.5295/cdg.19091cb
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Keywords
Family firm, reputation, private benefits, informativeness
References
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ANDERSON, R. y REEB, D.M. (2003): «Founding Family Ownership and Firm Performance: Evidence from the S&P 500», The Journal of Finance, Vol 58, No 3, pp. 1301-1328.
BEBCHUK, L.A. (1999): «A rent-protection theory of corporate ownership and control. National Bureau of Economic Research», Working Paper, 7203.
BURKART, M.; PANUNZI, F. Y SHLEIFER, A. (2003): «Family firms», The Journal of Finance, Vol. 58, pp. 2167-2201.
CLAESSENS, S.; DJANKOV, S. Y LANG, L. (2000): «The separation of ownership and control in East Asian corporations», Journal of Financial Economics, Vol. 58, pp. 81-112.
COLLINS, D.W. Y KOTHARI, S.P. (1989): «An analysis of intertemporal and cross-sectional determinants of earnings response coefficients», Journal of Accounting and Economics, Vol. 11, pp. 143-181.
CHRISMAN, J.; CHUA, J. Y SHARMA, P. (2005) «Trends and directions in the development of a strategic management theory of the family firm», Entrepreneurship Theory and Practice, september, 555-575.
DHALIWAL, D; LEE, K. Y FARGHER, N. (1991): «The association between unexpected earnings and abnormal security returns in the presence of financial leverage», Contemporary Accounting Research 8, pp. 20-41.
DEANGELO, H. y DEANGELO, L. (2000): «Controlling stockholders and the disciplinary role of corporate layout policy: a study of the Times Mirror Company», Journal of Financial and Economics, 56, pp. 153-207.
FACCIO, L Y LANG, L. (2002): «The ultimate ownership of Western European corporations», Journal of Financial Economics, Vol. 65, pp. 365-395.
FAMA, E.F. (1980): «Agency problems and the theory of the firm», Journal of Political Economy, Vol. 88, pp. 288-307.
FAMA, E.F. Y JENSEN, M.C. (1983): «Separation of ownership and control», Journal of Law & Economic, Vol. 26, pp. 301-325.
FAN, J.P.H Y WONG T.J. (2002): «Corporate ownership structure and the informativeness of accounting earnings in East Asia», Journal of Accounting and Economics, Vol. 33, pp. 401-425.
FRANCIS, J.; SCHIPPER, K. y VINCENT, L. (2005): «Earnings and dividend informativeness when cash flow rights are separated from voting rights», Journal of Financial and Economics, No 39, pp. 329-360.
GALVE GÓRRIZ, C. y SALAS FUMÁS, V. (1995): «Propiedad y eficiencia de la empresa: teoría y evidencias empíricas». Información Comercial Española, Abril, núm. 740, pp. 119-129.
GÓMEZ MEJÍA, L.R.; NÚÑEZ NICKEL y GUTIÉRREZ, I. (2001): «The Role of Family Ties in Agency Contracts», Academy of Management Journal, Vol. 44, No 1, pp. 81-95.
GUL, F.A. Y WAH, L.K. (2002): «Insider entrenchment, board leadership structure and informativeness of earnings», http://ssrn.com/abstract=304399.
HAW, I.; HU, B., HWANG, L. y WU, W. (2004): «Ultimate Ownership, Income Management, y Legal y Extra-Legal Institutions», Journal of Accounting Research, No 42, pp. 423-462.
HUTTON, A.P (2007): «A discussion of «Corporate disclosure of family firms», Journal of Accounting and Economics,Vol 44, p. 287-297.
IMHOFF, E.A. Y LOBO, G.J. (1992): «The effect of ex ante earnings uncertainty on earnings response coefficients», The Accounting Review, Vol. 67, pp. 427-439.
JAMES, H. (1999): «Ownership manager, extended horizons and the family firm», International Journal of the Economics of Business, 6, p. 41-56.
JENSEN, M.C. Y MECKLING, W.H. (1976): «Theory of the firm: managerial behavior, agency cost and ownership structure», Journal of Financial Economic, Vol. 3, pp. 305-360.
LA PORTA, R.; LÓPEZ-DE-SILANES, F.; SHLEIFER, A. y VISHNY, R. (1998): «Law and Finance» Journal of Political Economy, 106, pp. 1113-1155.
LA PORTA, R.; LÓPEZ-DE-SILANES, F. Y SHLEIFER, A. (1999): «Corporate ownership around the world», The Journal of Finance. Vol. 54, pp. 471-517.
LA PORTA, R.; LÓPEZ-DE-SILANES, F.; SHLEIFER, A. Y VISHNY, R. (2000): «Investor protection and corporate governance», Journal of Financial Economics, Vol 58, No 1-2, pp.3-27.
MORCK, R; SHLEIFER, A, y VISHNY, W. (1988): «Management ownership and market valuation: an empirical analysis», Journal of Financial Economics, Vol. 20, pp. 292-315.
PETERSEN, M.A. (2006) «Estimating standard errors in finance panel data sets: Comparing approaches», Kellogg Finance Department Working Paper No. 329.
SANTANA MARTIN, D.J. y AGUIAR DÍAZ, I. (2006): «El último propietario de las empresas cotizadas españolas.1996-2002», Cuadernos de Economía y Dirección de la Empresa, 26, pp. 47-72.
SANTANA MARTÍN, D.J., BONA SÁNCHEZ, C. y PÉREZ ALEMÁN, J. (2007): «Estructura de propiedad y capacidad informativa de los resultados contables», Revista Española de Financiación y Contabilidad, 133, pp. 55-72.
SUBRAMANYAM, K.R. Y WILD, J.J. (1996): «Going-Concern status, earnings persistence, and informativeness of earnings», Contemporary Accounting Research, Vol. 13, pp. 251-273.
TEO, S.H. Y WONG, T.J. (1993): «Perceived auditor quality and the earnings response coefficients», The Accounting Review, Vol. 68, pp. 346-367.
THOMSEN, S. Y PEDERSEN, T. (2000): «Ownership structure and economic performance in the largest European companies», Strategic Management Journal, Vol. 21, pp. 689-705.
VILLALONGA, B. y AMIT, R. (2006): «How do family ownership, control and management affect firm value? », Journal of Financial Economics, vol.80, pp. 385-417.
WANG, D. (2006): «Founding family ownership and earnings quality», Journal of Accounting and Research. Vol 44, p. 619-655.
WARFIELD, T. D.; WILD, J.J. Y WILD, K.L. (1995): «Managerial ownership, accounting choices, and informativeness of earnings», Journal of Accounting and Economics, Vol. 20, pp. 61-91.
YEO, G.H.H.; TAN, P.M.S.; HO, K.W. Y CHEN, S.S. (2002): «Corporate Ownership Structure and the Informativeness of Earnings», Journal of Business Finance & Accounting, Vol. 29, pp. 1023-1046.
ANDERSON, R. y REEB, D.M. (2003): «Founding Family Ownership and Firm Performance: Evidence from the S&P 500», The Journal of Finance, Vol 58, No 3, pp. 1301-1328.
BEBCHUK, L.A. (1999): «A rent-protection theory of corporate ownership and control. National Bureau of Economic Research», Working Paper, 7203.
BURKART, M.; PANUNZI, F. Y SHLEIFER, A. (2003): «Family firms», The Journal of Finance, Vol. 58, pp. 2167-2201.
CLAESSENS, S.; DJANKOV, S. Y LANG, L. (2000): «The separation of ownership and control in East Asian corporations», Journal of Financial Economics, Vol. 58, pp. 81-112.
COLLINS, D.W. Y KOTHARI, S.P. (1989): «An analysis of intertemporal and cross-sectional determinants of earnings response coefficients», Journal of Accounting and Economics, Vol. 11, pp. 143-181.
CHRISMAN, J.; CHUA, J. Y SHARMA, P. (2005) «Trends and directions in the development of a strategic management theory of the family firm», Entrepreneurship Theory and Practice, september, 555-575.
DHALIWAL, D; LEE, K. Y FARGHER, N. (1991): «The association between unexpected earnings and abnormal security returns in the presence of financial leverage», Contemporary Accounting Research 8, pp. 20-41.
DEANGELO, H. y DEANGELO, L. (2000): «Controlling stockholders and the disciplinary role of corporate layout policy: a study of the Times Mirror Company», Journal of Financial and Economics, 56, pp. 153-207.
FACCIO, L Y LANG, L. (2002): «The ultimate ownership of Western European corporations», Journal of Financial Economics, Vol. 65, pp. 365-395.
FAMA, E.F. (1980): «Agency problems and the theory of the firm», Journal of Political Economy, Vol. 88, pp. 288-307.
FAMA, E.F. Y JENSEN, M.C. (1983): «Separation of ownership and control», Journal of Law & Economic, Vol. 26, pp. 301-325.
FAN, J.P.H Y WONG T.J. (2002): «Corporate ownership structure and the informativeness of accounting earnings in East Asia», Journal of Accounting and Economics, Vol. 33, pp. 401-425.
FRANCIS, J.; SCHIPPER, K. y VINCENT, L. (2005): «Earnings and dividend informativeness when cash flow rights are separated from voting rights», Journal of Financial and Economics, No 39, pp. 329-360.
GALVE GÓRRIZ, C. y SALAS FUMÁS, V. (1995): «Propiedad y eficiencia de la empresa: teoría y evidencias empíricas». Información Comercial Española, Abril, núm. 740, pp. 119-129.
GÓMEZ MEJÍA, L.R.; NÚÑEZ NICKEL y GUTIÉRREZ, I. (2001): «The Role of Family Ties in Agency Contracts», Academy of Management Journal, Vol. 44, No 1, pp. 81-95.
GUL, F.A. Y WAH, L.K. (2002): «Insider entrenchment, board leadership structure and informativeness of earnings», http://ssrn.com/abstract=304399.
HAW, I.; HU, B., HWANG, L. y WU, W. (2004): «Ultimate Ownership, Income Management, y Legal y Extra-Legal Institutions», Journal of Accounting Research, No 42, pp. 423-462.
HUTTON, A.P (2007): «A discussion of «Corporate disclosure of family firms», Journal of Accounting and Economics,Vol 44, p. 287-297.
IMHOFF, E.A. Y LOBO, G.J. (1992): «The effect of ex ante earnings uncertainty on earnings response coefficients», The Accounting Review, Vol. 67, pp. 427-439.
JAMES, H. (1999): «Ownership manager, extended horizons and the family firm», International Journal of the Economics of Business, 6, p. 41-56.
JENSEN, M.C. Y MECKLING, W.H. (1976): «Theory of the firm: managerial behavior, agency cost and ownership structure», Journal of Financial Economic, Vol. 3, pp. 305-360.
LA PORTA, R.; LÓPEZ-DE-SILANES, F.; SHLEIFER, A. y VISHNY, R. (1998): «Law and Finance» Journal of Political Economy, 106, pp. 1113-1155.
LA PORTA, R.; LÓPEZ-DE-SILANES, F. Y SHLEIFER, A. (1999): «Corporate ownership around the world», The Journal of Finance. Vol. 54, pp. 471-517.
LA PORTA, R.; LÓPEZ-DE-SILANES, F.; SHLEIFER, A. Y VISHNY, R. (2000): «Investor protection and corporate governance», Journal of Financial Economics, Vol 58, No 1-2, pp.3-27.
MORCK, R; SHLEIFER, A, y VISHNY, W. (1988): «Management ownership and market valuation: an empirical analysis», Journal of Financial Economics, Vol. 20, pp. 292-315.
PETERSEN, M.A. (2006) «Estimating standard errors in finance panel data sets: Comparing approaches», Kellogg Finance Department Working Paper No. 329.
SANTANA MARTIN, D.J. y AGUIAR DÍAZ, I. (2006): «El último propietario de las empresas cotizadas españolas.1996-2002», Cuadernos de Economía y Dirección de la Empresa, 26, pp. 47-72.
SANTANA MARTÍN, D.J., BONA SÁNCHEZ, C. y PÉREZ ALEMÁN, J. (2007): «Estructura de propiedad y capacidad informativa de los resultados contables», Revista Española de Financiación y Contabilidad, 133, pp. 55-72.
SUBRAMANYAM, K.R. Y WILD, J.J. (1996): «Going-Concern status, earnings persistence, and informativeness of earnings», Contemporary Accounting Research, Vol. 13, pp. 251-273.
TEO, S.H. Y WONG, T.J. (1993): «Perceived auditor quality and the earnings response coefficients», The Accounting Review, Vol. 68, pp. 346-367.
THOMSEN, S. Y PEDERSEN, T. (2000): «Ownership structure and economic performance in the largest European companies», Strategic Management Journal, Vol. 21, pp. 689-705.
VILLALONGA, B. y AMIT, R. (2006): «How do family ownership, control and management affect firm value? », Journal of Financial Economics, vol.80, pp. 385-417.
WANG, D. (2006): «Founding family ownership and earnings quality», Journal of Accounting and Research. Vol 44, p. 619-655.
WARFIELD, T. D.; WILD, J.J. Y WILD, K.L. (1995): «Managerial ownership, accounting choices, and informativeness of earnings», Journal of Accounting and Economics, Vol. 20, pp. 61-91.
YEO, G.H.H.; TAN, P.M.S.; HO, K.W. Y CHEN, S.S. (2002): «Corporate Ownership Structure and the Informativeness of Earnings», Journal of Business Finance & Accounting, Vol. 29, pp. 1023-1046.
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