Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia

As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable. This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public...

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Main Authors:	Shehabaddin Abdullah A. Al-Dubai, Ku Nor Izah Ku Ismail, Noor Afza Amran
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2015
Online Access:	http://journalarticle.ukm.my/9520/ http://journalarticle.ukm.my/9520/ http://journalarticle.ukm.my/9520/1/11139-30905-1-PB.pdf

id	ukm-9520
recordtype	eprints
spelling	ukm-95202016-12-14T06:50:11Z http://journalarticle.ukm.my/9520/ Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia Shehabaddin Abdullah A. Al-Dubai, Ku Nor Izah Ku Ismail, Noor Afza Amran, As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable. This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public listed companies in Saudi Arabia over five consecutive years (2007- 2011). Interestingly, we provided evidence that the behavior of the Saudi families is changeable between expropriation and monitoring during the life of the business depending on the percentage of family ownership. We found sufficient evidence that the turning point occurs at the 28% family ownership. This confirmed the expropriated-monitoring behavior of family shareholders in their businesses. These results were robust with respect to different family definitions and analyses. Our findings suggested that investors should not undervalue Saudi family firms due to family ownership per se. At a certain degree of ownership, the benefits of Saudi family monitoring actually exceed the costs. The results suggested that there may be a need to encourage policy makers in Saudi Arabia to impose the full disclosure of firms’ ownership information, including the percentage of ownership and the identity of owners. Penerbit Universiti Kebangsaan Malaysia 2015 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/9520/1/11139-30905-1-PB.pdf Shehabaddin Abdullah A. Al-Dubai, and Ku Nor Izah Ku Ismail, and Noor Afza Amran, (2015) Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia. Jurnal Pengurusan, 44 . pp. 1-13. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/700
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable. This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public listed companies in Saudi Arabia over five consecutive years (2007- 2011). Interestingly, we provided evidence that the behavior of the Saudi families is changeable between expropriation and monitoring during the life of the business depending on the percentage of family ownership. We found sufficient evidence that the turning point occurs at the 28% family ownership. This confirmed the expropriated-monitoring behavior of family shareholders in their businesses. These results were robust with respect to different family definitions and analyses. Our findings suggested that investors should not undervalue Saudi family firms due to family ownership per se. At a certain degree of ownership, the benefits of Saudi family monitoring actually exceed the costs. The results suggested that there may be a need to encourage policy makers in Saudi Arabia to impose the full disclosure of firms’ ownership information, including the percentage of ownership and the identity of owners.
format	Article
author	Shehabaddin Abdullah A. Al-Dubai, Ku Nor Izah Ku Ismail, Noor Afza Amran,
spellingShingle	Shehabaddin Abdullah A. Al-Dubai, Ku Nor Izah Ku Ismail, Noor Afza Amran, Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
author_facet	Shehabaddin Abdullah A. Al-Dubai, Ku Nor Izah Ku Ismail, Noor Afza Amran,
author_sort	Shehabaddin Abdullah A. Al-Dubai,
title	Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
title_short	Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
title_full	Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
title_fullStr	Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
title_full_unstemmed	Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia
title_sort	are family members expropriated-monitoring shareholders? non-linear evidence from the saudi arabia
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2015
url	http://journalarticle.ukm.my/9520/ http://journalarticle.ukm.my/9520/ http://journalarticle.ukm.my/9520/1/11139-30905-1-PB.pdf
first_indexed	2023-09-18T19:55:06Z
last_indexed	2023-09-18T19:55:06Z
_version_	1777406476629835776

Are family members expropriated-monitoring shareholders? non-linear evidence from the Saudi Arabia

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