A Family Member or Professional Management? The Choice of a CEO and Its Impact on Performance
In this study, we explore what kinds of family firms are more likely to have a family CEO or professional CEO, and investigate the performance of CEOs from different backgrounds. The results show that firms with low requirements in managerial skills and a high potential for expropriation are more likely to choose a CEO from the controlling family (nepotism). Our investigation, furthermore, shows that when a firm requires high managerial skills, using a professional CEO can help firm performance, especially if the family has low cash-flow rights and weak control. When there is large opportunity for expropriation in a family firm, the firm's performance will be better if the CEO is a family member and the family has highly persuasive cash-flow rights. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.
Year of publication: |
2007
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Authors: | Lin, Shu-hui ; Hu, Shing-yang |
Published in: |
Corporate Governance: An International Review. - Wiley Blackwell, ISSN 0964-8410. - Vol. 15.2007, 6, p. 1348-1362
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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