Family Firms – Top Three Research Papers

Corporate governance and ESG are fast-evolving topics and it’s easy to fall behind on research. Our team analyzed 20 working papers published on ECGI’s website and found these three to be the most informative and engaging.

Did “ESG” Firms Perform Better During COVID-19 Shock?

COVID-19 tested sustainability across the board. This paper explored how environmental and social “ES” companies and ESG-focused investors performed as markets crashed around them. 

Paper: Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash

Do CEO Re-appointments affect Management Style?

If you looked at the behavior of family firms the year before a reappointment, what would you find? Authors Goergen, Mira, and Ansari argue that firms that reappoint founder-CEOs use an “upwards earning” management style before the event.   

Paper: Earnings Management around Founder CEO Re-appointments and Successions in Family Firms

Is Blood Thicker than Money in Family Firms?

There is an ongoing debate centered around profits vs. sustainability, with most private equity investors shifting to long-term strategies. With family firms, there is another variable to consider. This paper explores the claim that firm hiring decisions are often motivated by “kin altruism” rather than maximizing valuation or social responsibility. 

Paper: Blood and Money: Kin Altruism, Governance, and Inheritance in the Family Firm

Why Corporate Governance Matters

We noticed an overlapping theme throughout the research papers: the connection between transparency and long-term sustainability. Appearances (upwards management, kin altruism) can drive valuations in the short-term but do little to strengthen the structural and operational integrity of a firm.

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