OWNER CONTROL AND FIRM GROWTH: AN EMPIRICAL INVESTIGATION ON THE CONTROL DILEMMA IN PUBLIC FIRMS
Journal
SMS Strategic Management Society
Type
conference paper
Date Issued
2023-10-01
Author(s)
Abstract
Owners who have concentrated ownership and take on the board chair position wield a significant degree of control concentration. Our study explores how concentrated control in owners such as family members, founders, or lone entrepreneurs affects firm growth. We build on the theory of Schulze and Zellweger (2021), who proposed that owner control comes with control advantages and control hazards. We define concentrated control as a combination of ownership concentration and board control exercised via the board chair position. Using data from a large sample of owner-controlled public firms in the US, we find that concentrated control comes with benefits and costs for firm growth. In particular, we show that concentrated ownership alone enhances firm growth while combining concentrated ownership and board control via the board chair position harms firm growth. We further propose governance mechanisms that aim to mitigate the control hazards in owner-board chairs with concentrated ownership. The study empirically investigates the owner-control dilemma in public firms and adds to emerging discussions on stakeholder governance and strategic ownership.
Funding(s)
SNF
Language
English
Pages
7
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SMS Proposal_Owner control and firm growth An empirical investigation on the control dilemma in public firms.pdf
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341.52 KB
Format
Adobe PDF
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