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Do Family Firms Provide More or Less Voluntary Disclosure?

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  • SHUPING CHEN
  • XIA CHEN
  • QIANG CHENG
Abstract
We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results.

Suggested Citation

  • Shuping Chen & Xia Chen & Qiang Cheng, 2008. "Do Family Firms Provide More or Less Voluntary Disclosure?," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 499-536, June.
    • Handle: RePEc:bla:joares:v:46:y:2008:i:3:p:499-536
    DOI: 10.1111/j.1475-679X.2008.00288.x
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    References listed on IDEAS

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