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Do family firms matter in IPO markets? Initial returns performance of family and non-family firms - a critical perspective: Australian evidence

Mroczkowski, Nicholas and Tanewski, George 2009, Do family firms matter in IPO markets? Initial returns performance of family and non-family firms - a critical perspective: Australian evidence, International journal of critical accounting, vol. 1, no. 3, pp. 228-261, doi: 10.1504/IJCA.2009.027318.


Title Do family firms matter in IPO markets? Initial returns performance of family and non-family firms - a critical perspective: Australian evidence
Author(s) Mroczkowski, Nicholas
Tanewski, George
Journal name International journal of critical accounting
Volume number 1
Issue number 3
Start page 228
End page 261
Total pages 34
Publisher Inderscience Publishers
Place of publication Olney, Eng.
Publication date 2009
ISSN 1757-9848
1757-9856
Summary This study examines the initial price performance of family and non-family controlled IPO firms listed on the Australian Securities Exchange (ASX) between 1988 and 1999. Ownership and control are significant factors that influence managerial incentives, whereas the dynamics underlying family relationships reduce agency costs, improve efficiency and positively impact on firm performance. The study finds evidence of lower (15.54%) initial underpricing on the first day of trading for family firms compared with non-family IPOs (36.12%) after adjusting for industry effects. The results also show a positive and significant association between firm value and fractional ownership for both family and non-family firms, which indicates that family and non-family IPO firms use fractional ownership to signal the value of the firm. These findings provide empirical support for signalling models articulated in the literature. Implications of these differences will allow market participants to make more informed investment choices. For example, investors seeking higher immediate returns might choose to invest in non-family firms rather than in family controlled firms.
Language eng
DOI 10.1504/IJCA.2009.027318
Field of Research 1501 Accounting, Auditing And Accountability
Socio Economic Objective 0 Not Applicable
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2009, Inderscience Enterprises Ltd.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30091017

Document type: Journal Article
Collection: Department of Accounting
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