Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53821
Authors: 
King, Michael R.
Santor, Eric
Year of Publication: 
2007
Series/Report no.: 
Bank of Canada Working Paper 2007,40
Abstract: 
This study examines how family ownership affects the performance and capital structure of 613 Canadian firms using a panel dataset from 1998 to 2005. In particular, we distinguish the effect of family ownership from the use of control-enhancing mechanisms. We find that freestanding family-owned firms with a single share class have similar market performance than other firms based on Tobin's q ratios, superior accounting performance based on ROA, and higher financial leverage based on debt-to-total assets. By contrast, family-owned firms that use dual-class shares have valuations that are lower by 17% on average relative to widely-held firms, despite having similar ROA and financial leverage. Finally, concentrated ownership by either a corporation or a financial institution does not significantly affect firm performance.
Subjects: 
Financial markets
International topics
JEL: 
G12
G15
Document Type: 
Working Paper

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