Financial Reporting in Family Firms: A Socio-Emotional Wealth Approach Toward Information Quality
Calabró A., Cameran M., Campa D., Pettinicchio A., Financial reporting in family firms: a socioemotional wealth approach toward information quality, Journal of Small Business Management, Forthcoming
47 Pages Posted: 8 Oct 2020
Date Written: August 10, 2020
Abstract
The strategic choices of family firms are influenced by economic and non-economic reference points. We contend that the preservation of the affect-related values a family derives from its ownership position in a firm (i.e., socio-emotional wealth – SEW) affects financial reporting quality and earnings management strategies. Using the voluntary International Financial Reporting Standards (IFRS) adoption by Italian unlisted family firms as a natural laboratory setting, we found that the level of SEW endowment impacts on financial reporting quality. Furthermore, we observe that IFRS adoption is associated with less accrual but higher real activity manipulation for increasing levels of SEW endowment.
Keywords: Family Firms, Socio-Emotional Wealth, Financial Reporting, Information Quality, IFRS
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