Business Faculty Publications


The Causal Effect of Family Control on Corporate Disclosures.

Document Type


Publication Date


Publication Title

Financial Management Association Annual Meeting


Family Firm Transparency, Family Ownership, Family control, Family Business, Ownership Structure, Corporate Opacity


Accounting | Business | Corporate Finance | Finance and Financial Management


Empirical studies report conflicting evidence regarding the information environment of public firms controlled by founding families. We use brokerage houses closing their research division as an exogenous shock to public information environment of covered firms to test whether family control influences corporate disclosure policy. After an exogenous information shock, we find that family firms provide greater disclosures, more informative disclosures, and more rapidly produce disclosures than nonfamily firms. Our results indicate that family control increase the likelihood of corporate disclosures by over 180% relative to nonfamily firms. disclosure increase across founder-, descendant-, and professional- led family firms. Overall, our analysis provides compelling evidence that family control increases corporate disclosures and improves stock market liquidity.

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