Family firm local involvement and the Local Home Bias phenomenon
| Autor: | Giulia Baschieri, Stefano Mengoli, Andrea Carosi |
|---|---|
| Přispěvatelé: | Baschieri G., Carosi A., Mengoli S., Baschieri, Giulia, Carosi, Andrea, Mengoli, Stefano |
| Jazyk: | angličtina |
| Rok vydání: | 2017 |
| Předmět: |
local commitment
Exploit Strategy and Management Control (management) Institutional investor Geography Planning and Development firm performance family involvement family firms local home bias Settore SECS-P/09 - Finanza Aziendale local home bia Phenomenon 0502 economics and business Market value 050208 finance 05 social sciences family involvement family firm Preference Local community firm performance Strategy and Management1409 Tourism Leisure and Hospitality Management Demographic economics Market transaction Business 050203 business & management Finance |
| Popis: | Research has documented that most of retail and institutional investors exhibit a strong preference for stocks issued by nearby listed firms (i.e. Local Home Bias). This phenomenon shapes corporate market value and the cost of funding. In this paper, we investigate whether the Local Home Bias is enhanced in family firms as a consequence of their symbiotic connection with the local community. Using a dataset of 2,951 Italian firm-year observations (1,481 are family firms) over the period 1999–2011, we find that Local Home Bias is not a widespread phenomenon and mainly occurs in founding family firms where the founder serves as CEO. The Local Home Bias is absent in non-family firms or in family firms where the owner has acquired control through a market transaction. Overall, results suggest that locally committed family firms trigger investor preference for local stocks and, in doing so, exploit the dedicated local clientele which shrinks the cost of funding. Ultimately, we argue the social contributions of family firms to the local community could even have opportunistic traits and a non-trivial economic effect. |
| Databáze: | OpenAIRE |
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