We study the propensity to hedge of closely-held family-managed firms. Family involvement in CEO positions positively affects the likelihood of hedging. The effect is stronger when the CEO belongs to the founding family, especially for long-tenured and founder CEOs. This evidence is consistent with the higher conservatism of family agents, aimed at protecting socioemotional wealth and avoiding loss of reputation and control. Information asymmetry and, more mildly, underdiversification increase the propensity to hedge. Corporate governance attributes proxying agency issues are not significant.
Barbi, M., Morresi, O. (2023). Corporate hedging, family firms, and CEO identity. EUROPEAN JOURNAL OF FINANCE, 29(10), 1106-1143 [10.1080/1351847X.2022.2081090].
Corporate hedging, family firms, and CEO identity
Morresi, Ottorino
2023-01-01
Abstract
We study the propensity to hedge of closely-held family-managed firms. Family involvement in CEO positions positively affects the likelihood of hedging. The effect is stronger when the CEO belongs to the founding family, especially for long-tenured and founder CEOs. This evidence is consistent with the higher conservatism of family agents, aimed at protecting socioemotional wealth and avoiding loss of reputation and control. Information asymmetry and, more mildly, underdiversification increase the propensity to hedge. Corporate governance attributes proxying agency issues are not significant.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
