An Annotated Bibliography
Edited by Alfredo De Massis, Pramodita Sharma, Jess H. Chua and James J. Chrisman
Chapter 4: The family business annotated bibliography
Adams, R., Almeida, H., and Ferreira, D. (2009). Understanding the relationship between founder-CEOs and firm performance. Journal of Empirical Finance, 16(1), 136–150. Article type: Strategic management topics: Keywords: Empirical (quantitative analysis). Primary: Corporate Governance. Secondary: Leadership and Ownership, Economic Performance. Founder-CEOs, CEO turnover, Instrumental variables, Family firms, Endogeneity. THE STUDY Study subject: The relationship between founder-CEOs and firm performance. Research How does the founder-CEO status affect firm performance? question: Key findings: The article provides evidence that founder-CEO status is endogenous in performance regressions. After factoring out the founder-CEO status, the evidence confirms that founder-CEO control is beneficial in large corporations of the United States. Furthermore, good performance reduces the likelihood that a founder retains the CEO title. Contributions The authors adopt new, fine-tuned, analytic methods, and research and their results strongly support the positive view of implications: founder control in large US corporations. The results imply that the effect of founder-CEOs cannot be correctly estimated using ordinary least squares methods due to endogeneity issues. The positive effect of founders on firm performance suggests the importance of distinguishing founder-led family firms from others when studying performance issues. Finally, the finding that founders are more likely to leave when their firms are doing well suggests 54 M2978 - DE MASSIS TEXT.indd 54 06/09/2012 09:51 Aldrich, H. E. 55 that founder-CEO succession can be very different from the succession of professional CEOs. EMPIRICAL DATA Sample short description: Public/ private: Industry: Secondary data sources: All publicly-traded firms in the 1998 Fortune...
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