Family firms and financial analyst activity

Nicolas Eugster (1, 2)

1 LEPA - Laboratoire d'Electrochimie Physique et Analytique
2 LEM - Lille économie management - UMR 9221

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, analysts' forecasts are shown to be more accurate for family firms than for other firms, suggesting a better information environment within these companies. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.

Domaines: Sciences de l'Homme et Société; Gestion et management

Nicolas Eugster. Family firms and financial analyst activity. Pacific-Basin Finance Journal, 2019, 57, pp.101005. ⟨10.1016/j.pacfin.2018.03.002⟩. ⟨hal-02511075⟩