Portfolio Restructuring in Family and Non-Family-Controlled Firms

Massimo Bau, Francesco Chirico, Robert E. Hoskisson, Seemantini Madhukar Pathak

Research output: Contribution to journalArticlepeer-review

Abstract

Are family firms’ corporate restructuring behaviors distinct from those of non-family firms? Although the corporate restructuring literature has drawn on economic motives for restructuring, recent developments in the family business literature suggest that both economic and noneconomic motives may result in distinct restructuring behaviors between family and non-family firms. We use Swedish Census data and draw on a sample of privately held family and non-family Swedish firms for the period between 2004 and 2007. Applying the core- periphery model to the family-firm corporate-restructuring context, we posit that family firms undertake restructuring at the periphery of their business to lower the impact on their core business. Our results support our arguments and show that compared with non-family firms, family firms acquire and divest more geographically distant, unrelated and larger but fewer businesses.

Disciplines

  • Finance
  • Business

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