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Family firms and financial analyst activity

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  • Eugster, Nicolas

Abstract

This paper examines the relationship between ownership structure, analyst coverage, and forecast error for the entire population of non-financial companies listed on the Swiss Exchange for the period 2003-2013. The results show a negative association between concentrated ownership and analyst coverage for both family firms and firms held by a nonfamily blockholder. Furthermore, forecasts of analysts are shown to be more accurate for family firms than for other firms. These results suggest that family ownership improves the quality of the firm’s information environment. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.

Suggested Citation

  • Eugster, Nicolas, 2017. "Family firms and financial analyst activity," FSES Working Papers 491, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    • Handle: RePEc:fri:fribow:fribow00491
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    Cited by:

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    3. Wan Nordin Wan-Hussin & Ameen Qasem & Norhani Aripin & Mohd Shazwan Mohd Ariffin, 2021. "Corporate Responsibility Disclosure, Information Environment and Analysts’ Recommendations: Evidence from Malaysia," Sustainability, MDPI, vol. 13(6), pages 1-27, March.

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    More about this item

    Keywords

    Ownership structure; concentrated ownership; family firms; nonfamily blockholder; widely held firms; analyst coverage; forecast error; information environment;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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