Exploring the Agency Consequences of Ownership Dispersion among the Directors of Private Family Firms

Using an agency-theoretic lens and insights drawn from the behavioral economics and family business literatures, we developed hypotheses concerning the effect of dispersion of ownership on the use of debt by private family-owned and family-managed firms. A field study of 1,464 family firms was condu...

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Bibliographic Details
Published in:	Academy of Management journal 2003-04, Vol.46 (2), p.179-194
Main Authors:	Schulze, William S., Lubatkin, Michael H., Dino, Richard N.
Format:	Article
Language:	eng
Subjects:	Agency theory Altruism Boards of directors Business administration Business structures Chief executive officers Corporate debt Debt Economics and Finance Family firms Family members Family owned businesses Firm theory Governance Growth industries Humanities and Social Sciences Hypotheses Management science Musical agency Organizational structure Ownership Regression analysis Sales growth Shareholders Siblings Special Research forum on Governance through Ownership Studies
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Summary:	Using an agency-theoretic lens and insights drawn from the behavioral economics and family business literatures, we developed hypotheses concerning the effect of dispersion of ownership on the use of debt by private family-owned and family-managed firms. A field study of 1,464 family firms was conducted. Results suggest that, during periods of market growth, the relationship between the use of debt and the dispersion of ownership among directors at family firms can be graphed as a U-shaped curve.
ISSN:	0001-4273 1948-0989