Why do Shareholders Value Marriage?
45 Pages Posted: 27 Mar 2008 Last revised: 8 Feb 2009
Date Written: March 18, 2008
Abstract
This paper shows that marriage can function in a similar way as mergers and acquisitions. To set up alliances that would benefit the firms, a controlling family would encourage their children to marry a person from a politically or economically powerful family. To test this hypothesis, we collect wedding announcements for the offspring of big-business owners in Thailand. The results from the event study show positive abnormal returns when the partner is from a well-connected family. The probit analysis shows that offspring are more likely to choose their partner from a well-connected family when the family's businesses are in the property and construction industries, based on state contracts, more diversified and heavily in debt. Overall, the results suggest that family networks might provide reputation capital, reliable information, and enforce contracts, thus reducing market frictions faced by entrepreneurs in weak institutional environments.
Keywords: family firms, business groups, governance, emerging economies, marriage, networks
JEL Classification: G15, G32, G34, G38, K23, M13
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?
By Lucia Foster, John Haltiwanger, ...
-
Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?
By Lucia Foster, John Haltiwanger, ...
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Measuring and Explaining Management Practices Across Firms and Countries
By John Van Reenen and Nicholas Bloom
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Measuring and Explaining Management Practices Across Firms and Countries
By Nicholas Bloom and John Van Reenen
-
Management Practices Across Firms and Countries
By Nicholas Bloom, Christos Genakos, ...
-
Inside the Family Firm: The Role of Families in Succession Decisions and Performance
By Morten Bennedsen, Kasper Meisner Nielsen, ...
-
Inside the Family Firm: The Role of Families in Succession Decisions and Performance
By Morten Bennedsen, Kasper Meisner Nielsen, ...