[We’re pleased to welcome Family Business Review editor Pramodita Sharma of the University of Vermont.]
The December 2014 issue of Family Business Review presents research from Colombia, Germany, Taiwan,and USA focused on various aspects of finance pertaining to family enterprises. Topics studied include financing and investment choices of family firms, dividend policies, post IPO performance. The editorial discusses the challenges and opportunities of publishing finance focused research in management journals such as Family Business Review, and vice versa. It is our hope that this important issue will help build further inroads in the important disciplinary interface between finance and family business studies.
You can read the December issue of Family Business Review free for the next 30 days! The lead article entitled “Family Involvement and Post-IPO Investment Policy” was authored by Bharat A. Jain and Yingying Shao, both of Towson University.
Drawing from agency theory and socioemotional wealth considerations, we evaluate the extent post-IPO investment policy choices and their economic consequences differ for family firms relative to nonfamily firms. Our results suggest that family firms underinvest in post-IPO liquidity, total investment spending, and R&D expenditures, relative to similar non-family firms. On the other hand, family firms overinvest in capital spending and underinvest in acquisition spending relative to nonfamily firms with dispersed but not concentrated ownership structures. Furthermore, while increases in R&D spending decrease shareholder value in family firms, the reverse is the case with acquisition spending.