Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia
As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable.This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public lis...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Universiti Kebangsaan Malaysia
2015
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/18174/1/JP%2044%202015%2057%20-%2065.pdf |
| _version_ | 1825803996260990976 |
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| author | Al-Dubai, Shehabaddin Abdullah A. Ku Ismail, Ku Nor Izah Amran, Noor Afza |
| author_facet | Al-Dubai, Shehabaddin Abdullah A. Ku Ismail, Ku Nor Izah Amran, Noor Afza |
| author_sort | Al-Dubai, Shehabaddin Abdullah A. |
| collection | UUM |
| description | As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable.This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value
relationship, based on 375 firm-year observations of 75 public listed companies in Saudi Arabia over five consecutive years (2007-2011).Interestingly, we provided evidence that the behavior of the Saudi families is changeable between expropriation and monitoring during the life of the business depending on the percentage of family ownership. We found sufficient evidence that the turning point occurs at the 28% family ownership.This confirmed the expropriated-monitoring behavior of family shareholders in their businesses.These results were robust with respect to different family definitions and analyses. Our findings suggested that investors should not undervalue Saudi family firms due to family ownership
per se. At a certain degree of ownership, the benefits of Saudi family monitoring actually exceed the costs.The results suggested that there may be a need to encourage policy makers in Saudi Arabia to impose the full disclosure of firms’
ownership information, including the percentage of ownership and the identity of owners. |
| first_indexed | 2024-07-04T06:07:12Z |
| format | Article |
| id | uum-18174 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:07:12Z |
| publishDate | 2015 |
| publisher | Universiti Kebangsaan Malaysia |
| record_format | eprints |
| spelling | uum-181742016-06-26T02:11:54Z https://repo.uum.edu.my/id/eprint/18174/ Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia Al-Dubai, Shehabaddin Abdullah A. Ku Ismail, Ku Nor Izah Amran, Noor Afza HF5601 Accounting As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable.This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public listed companies in Saudi Arabia over five consecutive years (2007-2011).Interestingly, we provided evidence that the behavior of the Saudi families is changeable between expropriation and monitoring during the life of the business depending on the percentage of family ownership. We found sufficient evidence that the turning point occurs at the 28% family ownership.This confirmed the expropriated-monitoring behavior of family shareholders in their businesses.These results were robust with respect to different family definitions and analyses. Our findings suggested that investors should not undervalue Saudi family firms due to family ownership per se. At a certain degree of ownership, the benefits of Saudi family monitoring actually exceed the costs.The results suggested that there may be a need to encourage policy makers in Saudi Arabia to impose the full disclosure of firms’ ownership information, including the percentage of ownership and the identity of owners. Universiti Kebangsaan Malaysia 2015 Article PeerReviewed application/pdf en cc_by https://repo.uum.edu.my/id/eprint/18174/1/JP%2044%202015%2057%20-%2065.pdf Al-Dubai, Shehabaddin Abdullah A. and Ku Ismail, Ku Nor Izah and Amran, Noor Afza (2015) Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia. Jurnal Pengurusan, 44. pp. 57-65. ISSN 0127-2713 http://ejournals.ukm.my/pengurusan/article/view/11139 |
| spellingShingle | HF5601 Accounting Al-Dubai, Shehabaddin Abdullah A. Ku Ismail, Ku Nor Izah Amran, Noor Afza Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title | Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title_full | Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title_fullStr | Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title_full_unstemmed | Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title_short | Are family members expropriated-monitoring shareholders? Non-linear evidence from the Saudi Arabia |
| title_sort | are family members expropriated monitoring shareholders non linear evidence from the saudi arabia |
| topic | HF5601 Accounting |
| url | https://repo.uum.edu.my/id/eprint/18174/1/JP%2044%202015%2057%20-%2065.pdf |
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