| Abstract: |
In this review article, we bring together a number of aspects of family firms
that are ubiquitous in a number of institutional contexts, often as part of
larger business groups. We pay particular attention to the mechanisms by which
families retain control over firms, and the incentives of the families in
control to expropriate other stakeholders by way of tunnelling. We examine the
role of earnings management in facilitating tunnelling, and evidence about the
incidence of earnings management in family firms. Our review suggests that
while the literature on these aspects of family control is rich, the contexts
in which the empirical exercises are undertaken are relatively few, and hence
there is considerable opportunity to expand it to other contexts, in
particular in the form of cross-country comparisons of the relative impact of
agency conflicts and institutions on these issues. |