| dc.description.abstract | This study examines the effect of family firms, CEO and ownership composition
on financial and operational risk-taking for 11,157 Norwegian private firms
between 2006 and 2015. First, this study finds clear indications that family firms
take on lower levels of financial risk compared to non-family firms. Furthermore,
the study finds evidence that supports the notion that family firms operate with
lower revenue volatility and hence a lower degree of operational risk. However, we
do not find any evidence indicating that family firms are less risk averse with
respect to their degree of operating leverage. Second, the study finds that the
presence of a family CEO has a negative effect on financial risk and the volatility
of revenues. The composition of fixed and variable costs observed for the
companies in the study is however, not affected by the management of the company.
Third, the study reveals that family firms, where the ultimate ownership exceeds
90 percent, tend to take on less financial risk and have a lower degree of operating
leverage compared to other family firms. We find no evidence that the
concentration of ownership, within family firms, affect the volatility of revenues.
Finally, the study finds that family firms with different ownership structures selfselect
in terms of risk-taking behaviour. Family firms with more concentrated
ownership self-select towards lower risk. In conclusion, our study finds that family
firms take on less risk than non-family firms in Norway. | nb_NO |
