Is Money for All or for Me? The Post-IPO Ownership Change Decision in the New Venture of Family Businesses
Date Issued
2016
Date
2016
Author(s)
Lin, Jung-Ching
Abstract
The real options literature on the strategic actions under uncertainty has been burgeoning. Although prior research identifies the growth option value of various forms of strategic investment through the samples of international joint ventures, new ventures of venture capital or R&D projects, the linkage between growth option value and the odds of exercising the option remains elusive. Through the lens of the real options theory, this study views a family firm’s new ventures as options created for growth, and explores the rationale behind a family firm’s self-serving decision on changing from corporate ownership to family ownership in the post-IPO period of a new venture. To bridge the gap of real options literature, this study argues that a family firm’s choice to exercise its growth options in the face of uncertainty not only depends on the option value but also becomes a situation-bound decision. Based on a sample of 204 IPO firms of 109 family business groups in Taiwan, the result shows that market uncertainty drives the growth option value embedded in the new venture and, in turn, leads to the family firm’s self-serving decision of ownership change. Also, the scope of a family business group augments the influence of market uncertainty on the growth option value. Furthermore, the quality of corporate governance, CSR intensity, is found to reduce the propensity of a family firm’s ownership change decision.
Subjects
real options
uncertainty
family firms
corporate governance
self-serving
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-105-D98724004-1.pdf
Size
23.32 KB
Format
Adobe PDF
Checksum
(MD5):c36c22fc77fba7191da517f39456ce12