Institutional Reforms and the Effects of Family Control on Corporate Governance
Journal
Family Business Review
Journal Volume
29
Journal Issue
2
Pages
174-188
Date Issued
2015
Author(s)
Abstract
According to the institution-based view of corporate governance, firm-governance efficiency is influenced by the institutional environment in which the firm operates. In this study, we examine how firms under a family-governance system adapted to institutional reforms over time. The results of the analysis indicate that institutional reforms reduce firm dependence on family governance and eliminate the negative effects on performance exerted by a controlling family’s pyramidal ownership structure. We also find that institutional reforms foster external corporate governance by domestic institutional investors. In conclusion, our study shows that institutional reforms alter the essence of family firm governance.
Type
journal article