Founding Family Firms and Earnings Qualities

• Main Authors: Ting-Li Lin, 林庭立
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/99505270980415651842

碩士 === 雲林科技大學 === 財務金融系碩士班 === 99 === I use three proxies, the earnings response coefficient, the earnings persistence and the predictive ability of cash flow, to analyze earnings qualities of founding family firms using all listed companies in Taiwan from 2000 to 2009. The results show that, founding family firms report better earnings response coefficient and predictability of cash flow, but report worse earnings persistence than non-family firms. Consider the Type I agency problem, I find that founding family firms with family CEOs have an insignificant ability to eliminate the Type I agency problem. Further take the Type II agency problem into account, founding family firms, which have the deviation between controlling rights and cash flow rights, report worse earnings response coefficient and worse earnings persistence, but have the better predictive ability of cash flow than non-family firms. Finally considered the effects on different roles of CEOs, I find, except the founding family firm with descendant CEOs facing worse earnings persistence, that founding family firms have insignificantly different earnings qualities with non-family firms. These results show that the founding family firms in Taiwan have no significant ability to reduce the Type I agency problem. In addition, the effort of Type II agency problem is not absolutely good or bad on the founding family firms in Taiwan.