File(s) not publicly available
Do family firms matter in IPO markets? Initial returns performance of family and non-family firms - a critical perspective: Australian evidence
journal contribution
posted on 2009-01-01, 00:00 authored by Nicholas Mroczkowski, G TanewskiThis study examines the initial price performance of family and non-family controlled IPO firms listed on the Australian Securities Exchange (ASX) between 1988 and 1999. Ownership and control are significant factors that influence managerial incentives, whereas the dynamics underlying family relationships reduce agency costs, improve efficiency and positively impact on firm performance. The study finds evidence of lower (15.54%) initial underpricing on the first day of trading for family firms compared with non-family IPOs (36.12%) after adjusting for industry effects. The results also show a positive and significant association between firm value and fractional ownership for both family and non-family firms, which indicates that family and non-family IPO firms use fractional ownership to signal the value of the firm. These findings provide empirical support for signalling models articulated in the literature. Implications of these differences will allow market participants to make more informed investment choices. For example, investors seeking higher immediate returns might choose to invest in non-family firms rather than in family controlled firms.
History
Journal
International journal of critical accountingVolume
1Issue
3Pagination
228 - 261Publisher
Inderscience PublishersLocation
Olney, Eng.Publisher DOI
ISSN
1757-9848eISSN
1757-9856Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2009, Inderscience Enterprises Ltd.Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC