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Cofounders and the Value of Family Firms

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  • Jae-Seung Baek
  • Jungmin Kim

Abstract

Prior literature documents the positive effect of the founder’s role on family-firm value. In this study, we examine whether the existence of cofounders has any effect on family firm value. We find that the outperformance of founder family firms is concentrated in family firms with cofounders as measured by Tobin’s q. Our results are robust when we use return on assets (ROA) as an alternative measure. These findings suggest that the presence of cofounders would reduce the potential risk arising from the absence of the sole founder and the power concentration in the sole founder and thus lead to higher firm value.

Suggested Citation

  • Jae-Seung Baek & Jungmin Kim, 2015. "Cofounders and the Value of Family Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(S3), pages 20-33, May.
    • Handle: RePEc:mes:emfitr:v:51:y:2015:i:s3:p:20-33
    DOI: 10.1080/1540496X.2015.1039899
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    Cited by:

    1. Sági Judit & Juhász Péter, 2019. "Funding alternatives and business planning in family businesses," Prosperitas, Budapest Business University, vol. 6(1), pages 35-53.
    2. Sági Judit & Juhász Péter, 2019. "Funding alternatives and business planning in family businesses," Prosperitas, Budapest Business School, vol. 2019(1), pages 35-53.

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