Multiple Large Shareholders and Corporate Risk-Taking: Evidence from French Family Firms

European Financial Management, Forthcoming

52 Pages Posted: 26 Dec 2015 Last revised: 13 Jan 2016

See all articles by Sabri Boubaker

Sabri Boubaker

Ecole de Management de Normandie

Pascal Nguyen

Neoma Business School; University of Technology Sydney (UTS); Financial Research Network (FIRN)

Wael Rouatbi

Montpellier Business School

Date Written: December 25, 2015

Abstract

We investigate the role of multiple large shareholders (MLS) in corporate risk-taking. Using a sample of publicly listed French family firms over the period 2003-2012, we show that the presence, number, and voting power of MLS are associated with higher risk-taking. Our results suggest that MLS help restrain the propensity of family owners to undertake low-risk investments. This effect is much stronger in firms that are more susceptible to agency conflicts. The results highlight the important governance role played by MLS in family firms and may explain why MLS are associated with higher firm performance.

Keywords: Risk-taking, Ownership structure, Family firms, Private benefits of control, Contestability, Corporate governance

JEL Classification: G30, G32, G34

Suggested Citation

Boubaker, Sabri and Nguyen, Pascal and Rouatbi, Wael, Multiple Large Shareholders and Corporate Risk-Taking: Evidence from French Family Firms (December 25, 2015). European Financial Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2708280

Sabri Boubaker (Contact Author)

Ecole de Management de Normandie ( email )

9 rue Claude Bloch
Le Havre Cedex, Cedex 4 14052 Caen
France

HOME PAGE: http://https://www.em-normandie.com/en/sabri-boubaker

Pascal Nguyen

Neoma Business School ( email )

1 Rue du Maréchal Juin
Mont Saint Aignan Cedex, 76825
France
+33 2 3282 5774 (Phone)

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
+61 2 9514 7718 (Phone)
+61 2 9514 7711 (Fax)

HOME PAGE: http://datasearch.uts.edu.au/business/finance/staff/StaffDetails.cfm?UnitStaffId=4415

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Wael Rouatbi

Montpellier Business School ( email )

2300 Avenue des Moulins
Montpellier, 34080
France

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