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Abstract
Family firms may experience different agency conflicts to the classical principal‐agent conflict, which arise depending on the varying extent of family involvement. Agency cost control mechanisms should be introduced to cope with them. The paper focuses on family involvement, in governance () and in management (), agency cost control mechanisms, and financial performance in family . The results show that is negatively related to agency cost control mechanisms, but they are positively related to , Finally, the importance of agency cost control mechanisms positively influences the financial performance. Hypotheses were tested using .
Notes
1. Average variance extracted =(Σ λYi2)/(Σ λYi2+ Σ var (errors)). The discriminant validity has been assessed by taking the square root of the “Average variance extracted” whose formula is presented earlier (Fornell and Larcker Citation1981).
Additional information
Notes on contributors
Lucrezia Songini
Lucrezia Songini is professor of Managerial Accounting in the Department of Economics and Business at the Eastern Piedmont University.
Luca Gnan
Luca Gnan is professor of Organisational Behavior, Economy and Finance at the Tor Vergata University of Rome.