Profitability of Foreign Family-Controlled Firms: The Case of American Depository Receipts
Journal of Business Issues, 2012 (1): 23-34
12 Pages Posted: 17 Feb 2013
Date Written: 2012
Abstract
We analyze the relative operating performance of Family Business’ list of the largest family-controlled firms versus non-family-controlled firms listed in the S&P 500. Our cross-sectional data includes over 400 firms and eleven years of data. We provide empirical evidence to demonstrate that family-controlled firms are more profitable than non-family-controlled firms. However, this is limited to family-firms trading as American Depository Receipts (ADR). We show that foreign family-controlled firms that trade as ADRs outperform U.S. family-controlled firms. It appears that family-owned firms have taken advantage of the reduction in capital barriers when they access U.S. stock exchanges. We conclude that foreign family-controlled firms are better able to exploit their growth opportunities compared with a sample of large U.S. firms.
Keywords: family firms, American depository receipts, operating performance
JEL Classification: G30, G32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Why are Foreign Firms Listed in the U.S. Worth More?
By Craig Doidge, George Andrew Karolyi, ...
-
Why are Foreign Firms Listed in the U.S. Worth More?
By Craig Doidge, George Andrew Karolyi, ...