1,969
Views
105
CrossRef citations to date
0
Altmetric
Articles

Financial Reporting and the Protection of Socioemotional Wealth in Family-Controlled Firms

, &
Pages 387-402 | Received 01 Jun 2013, Accepted 01 Oct 2013, Published online: 04 Sep 2014

REFERENCES

  • Adams, J., Taschian, A., & Shore, T. (1996). Ethics in family and non family owned firms: An exploratory study. Family Business Review, 9, 157–170. doi: 10.1111/j.1741-6248.1996.00157.x
  • AICPA. (1994). Issues final paper on business reporting. Practical Accountant, 27, 76.
  • Ali, A., Chen, T., & Radhakrishan, S. (2007). Corporate disclosures by family firms. Journal of Accounting & Economics, 44, 238–286. doi: 10.1016/j.jacceco.2007.01.006
  • Anderson, R. C., & Reeb, D. V. (2004). Board composition: Balancing family influence in S&P 500 firms. Administrative Science Quarterly, 49, 209–237.
  • Badertscher, B. A. (2011). Overvaluation and the choice of alternative earnings management mechanisms. The Accounting Review, 86, 1491–1518. doi: 10.2308/accr-10092
  • Barth, M. E., Elliott, J. A., & Finn, M. W. (1999). Market rewards associated with patterns of increasing earnings. Journal of Accounting Research, 37, 387–413. doi: 10.2307/2491414
  • Bartov, E., Givoly, D., & Hayn, C. (2002). The rewards to meeting or beating earnings expectations. Journal of Accounting & Economics, 33, 173–204. doi: 10.1016/S0165-4101(02)00045-9
  • Berrone, P., Cruz, C., Gomez-Mejia, L., & Larraza-Kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly, 55, 82–113. doi: 10.2189/asqu.2010.55.1.82
  • Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25, 258–279. doi: 10.1177/0894486511435355
  • Beyer, A., Cohen, D. A., Lys, T. Z., & Walther, B. R. (2010). The financial reporting environment: Review of the recent literature. Journal of Accounting & Economics, 50, 296–343. doi: 10.1016/j.jacceco.2010.10.003
  • Brown, L. D., & Caylor, M. L. (2005). A temporal analysis of quarterly earnings thresholds: Propensities and valuation consequences. Accounting Review, 80, 423–440. doi: 10.2308/accr.2005.80.2.423
  • Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting & Economics, 24, 99–126. doi: 10.1016/S0165-4101(97)00017-7
  • Cascino, S., Pugliese, A., Mussolino, D., & Sansone, C. (2010). The influence of family ownership on the quality of accounting information. Family Business Review, 23, 246–265. doi: 10.1177/0894486510374302
  • Cennamo, C., Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth and proactive stakeholder engagement: Why family-controlled firms care more about their stakeholders. Entrepreneurship: Theory and Practice, 36, 1153–1173.
  • Chen, S., Chen, X., & Cheng, Q. (2008). Do family firms provide more or less voluntary disclosure? Journal of Accounting Research, 46, 499–536. doi: 10.1111/j.1475-679X.2008.00288.x
  • Chrisman, J. J., & Patel, P. C. (2012). Variations in R&D investments of family and non-family firms: Behavioral agency and myopic loss aversion perspectives. Academy of Management Journal, 55, 976–997. doi: 10.5465/amj.2011.0211
  • Craig, J., & Dibrell, C. (2006). The natural environment, innovation, and firm performance: A comparative study. Family Business Review, 19, 275–288. doi: 10.1111/j.1741-6248.2006.00075.x
  • Cruz, C., Gomez-Mejia, L. R., & Becerra, M. (2010). Perceptions of benevolence and the design of agency contracts: CEO-TMT relationships in family firms. Academy of Management Journal, 53, 69–89. doi: 10.5465/AMJ.2010.48036975
  • Cruz, C., Larraza-Kintana, M., Garces-Galdeano, L., & Berrone, P. (2013). Are family firms socially responsible, really? Paper presented at the Theories of the Family Enterprise Conference, London.
  • Danco, L. A., & Ward, J. L. (1990). Beyond success: The continuing contribution of the family. Family Business Review, 3, 347–355. doi: 10.1111/j.1741-6248.1990.00347.x
  • Das, S., Kim, K., & Patro, S. (2011). An analysis of managerial use and market consequences of earnings management and expectation management. The Accounting Review, 86, 1935–1967. doi: 10.2308/accr-10128
  • Dechow, P., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting & Economics, 50, 344–401. doi: 10.1016/j.jacceco.2010.09.001
  • Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research, 13, 1–36. doi: 10.1111/j.1911-3846.1996.tb00489.x
  • DeFond, M. L., & Jiambalvo, J. (1994). Debt covenant violation and manipulation of accruals. Journal of Accounting & Economics, 17, 145–176. doi: 10.1016/0165-4101(94)90008-6
  • Degeorge, F., Patel, J., & Zeckhauser, R. (1999). Earnings management to exceed thresholds. Journal of Business, 72, 1–33. doi: 10.1086/209601
  • Diamond, D. W., & Verrecchia, R. E. (1991). Disclosure, liquidity, and the cost of capital. Journal of Finance, 46, 1325–1359. doi: 10.1111/j.1540-6261.1991.tb04620.x
  • Dyer, G. W., & Whetten, D. A. (2006). Family firms and social responsibility. Preliminary evidence from the S&P500. Entrepreneurship Theory and Practice, 30, 785–802. doi: 10.1111/j.1540-6520.2006.00151.x
  • Fan, J. P. H., & Wong, T. J. (2002). Corporate ownership structure and the informativeness of accounting earnings in East Asia. Journal of Accounting & Economics, 33, 401–425. doi: 10.1016/S0165-4101(02)00047-2
  • Fields, T. D., Lys, T. Z., & Vincent, L. (2001). Empirical research on accounting choice. Journal of Accounting & Economics, 31, 255–307. doi: 10.1016/S0165-4101(01)00028-3
  • Francis, J., Nanda, D., & Olsson, P. (2008). Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research, 46, 53–99. doi: 10.1111/j.1475-679X.2008.00267.x
  • Francis, J., Philbrick, D., & Schipper, K. (1994). Shareholder litigation and corporate disclosures. Journal of Accounting Research, 32, 137–164. doi: 10.2307/2491279
  • Gaspar, J., Massa, M., & Matos, P. (2006). Favoritism in mutual fund families? Evidence on strategic cross-fund subsidization. Journal of Finance, 61, 73–104. doi: 10.1111/j.1540-6261.2006.00830.x
  • Gomez-Mejia, L. R., Campbell, J., Martin, G., Hoskisson, R., Makri, M., & Sirmon, D. (2013). Socioemotional wealth as a mixed gamble: Revisiting family firm R&D investments with the behavioral agency model. Entrepreneurship Theory and Practice. doi:10.1111/etap.12083
  • Gomez Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals, 5, 653–707. doi: 10.1080/19416520.2011.593320
  • Gomez-Mejia, L. R., Haynes, K., Nuñez-Nickel, M., Jacobson, K. J. L., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106–137.
  • Gomez-Mejia, L. R., Makri, M., & Larraza-Kintana, M. (2010). Diversification decisions in family-controlled firms. Journal of Management Studies, 47, 223–252. doi: 10.1111/j.1467-6486.2009.00889.x
  • Gomez-Mejia, L. R., Welbourne, T., & Wiseman, R. M. (2000). The role of risk sharing and risk taking under gainsharing. Academy of Management Review, 25, 492–507.
  • Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting & Economics, 40, 3–73. doi: 10.1016/j.jacceco.2005.01.002
  • Haw, I. B., Hu, L., Hwang, L., & Wu, W. (2004). Ultimate ownership, income management, and legal and extra-legal institutions. Journal of Accounting Research, 42, 423–462.
  • Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting & Economics, 31, 405–440. doi: 10.1016/S0165-4101(01)00018-0
  • Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, 13, 365–383. doi: 10.2308/acch.1999.13.4.365
  • Hirst, D. E., Koonce, L., & Miller, J. (1999). The joint effect of management's prior forecast accuracy and the form of its financial forecasts on investor judgment. Journal of Accounting Research, 37, 101–124. doi: 10.2307/2491347
  • Hirst, D. E., Koonce, L., & Venkataraman, S. (2007). How disaggregation enhances the credibility of management earnings forecasts. Journal of Accounting Research, 45, 811–837. doi: 10.1111/j.1475-679X.2007.00252.x
  • Hirst, D. E., Koonce, L., & Venkataraman, S. (2008). Management earnings forecasts: A review and framework. Accounting Horizons, 22, 315–338. doi: 10.2308/acch.2008.22.3.315
  • Ho, S. S. M., & Wong, K. S. (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, Auditing & Taxation, 10, 139–156. doi: 10.1016/S1061-9518(01)00041-6
  • Jenkins, D. S., Kane, G. D., & Velury, U. (2009). Earnings conservatism and value relevance across the business cycle. Journal of Business Finance & Accounting, 36, 1041–1058. doi: 10.1111/j.1468-5957.2009.02164.x
  • Jensen, M. C. (2005). Agency costs of overvalued equity. Financial Management, 34, 5–19 (Blackwell Publishing Limited). doi: 10.1111/j.1755-053X.2005.tb00090.x
  • Jiang, J. (2008). Beating earnings benchmarks and the cost of debt. Accounting Review, 83, 377–416. doi: 10.2308/accr.2008.83.2.377
  • Jiraporn, P., & Dadalt, P. (2009). Does founding family control affect earnings management? Applied Economic Letters, 16, 113–119. doi: 10.1080/17446540701720592
  • Kasznik, R., & McNichols, M. F. (2002). Does meeting earnings expectations matter? Evidence from analyst forecast revisions and share prices. Journal of Accounting Research, 40, 727–759. doi: 10.1111/1475-679X.00069
  • Kellermanns, F. W., Eddleston, K. A., & Zellweger, T. (2012). Extending the socioemotional wealth perspective: A look at the dark side. Entrepreneurship Theory and Practice, 36, 1175–1182.
  • Kets de Vries, M. F. R. (1993). The dynamics of family controlled firms: The good and the bad news. Organizational Dynamics, 21, 59–71. doi: 10.1016/0090-2616(93)90071-8
  • Klein, A. (2002). Audit committee, board of director characteristics, and earnings management. Journal of Accounting & Economics, 33, 375–400. doi: 10.1016/S0165-4101(02)00059-9
  • Lambert, R., Leuz, C., & Verrecchia, R. E. (2007). Accounting information, disclosure, and the cost of capital. Journal of Accounting Research, 45, 385–420. doi: 10.1111/j.1475-679X.2007.00238.x
  • La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. Journal of Finance, 54, 471–517. doi: 10.1111/0022-1082.00115
  • Leuz, C., Nanda, D., & Wysocki, P. D. (2003). Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69, 505–527. doi: 10.1016/S0304-405X(03)00121-1
  • Levitt, A. (1998). The ‘numbers game’. CPA Journal, 68, 14–19.
  • Lubatkin, M., Schulze, W., Ling, Y., & Dino, R. (2005). The effects of parental altruism on the governance of family-managed firms. Journal of Organizational Behavior, 26, 313–330.
  • Martin, G., Campbell, J., & Gomez-Mejia, L. (2013). Family control, socioemotional wealth and earnings management in publicly traded firms (Unpublished paper). Mays Business School, Texas A&M University.
  • Martin, G., Gomez-Mejia, L., & Wiseman, R. (2013). Strategic implications of CEO compensation design: Revisiting the behavioral agency model. Academy of Management Journal, 56(2), 451–472. doi: 10.5465/amj.2010.0967
  • Matsumoto, D. A. (2002). Management's incentives to avoid negative earnings surprises. Accounting Review, 77, 483–514. doi: 10.2308/accr.2002.77.3.483
  • McVay, S. E. (2006). Earnings management using classification shifting: An examination of core earnings and special items. Accounting Review, 81, 501–531. doi: 10.2308/accr.2006.81.3.501
  • Mercer, M. (2004). How do investors assess the credibility of management disclosures? Accounting Horizons, 18, 185–196. doi: 10.2308/acch.2004.18.3.185
  • Merkl-Davies, D. M., & Brennan, N. M. (2007). Discretionary disclosure strategies in corporate narratives: Incremental information or impression management? Journal of Accounting Literature, 26, 116–194.
  • Merkl-Davies, D. M., & Brennan, N. M. (2011). A conceptual framework of impression management: New insights from psychology, sociology and critical perspectives. Accounting & Business Research, 41, 415–437 (Taylor & Francis). doi: 10.1080/00014788.2011.574222
  • Pazzaglia, F., Mengoli, S., & Sapienza, E. (2013). Earnings quality in acquired and nonacquired family firms: A socioemotional wealth perspective. Family Business Review, 26, 374–386.
  • Prencipe, A., Bar-Yosef, S., Mazzola, P., & Pozza, L. (2011). Income smoothing in family-controlled companies: Evidence from Italy. Corporate Governance: An International Review, 19, 529–546. doi: 10.1111/j.1467-8683.2011.00856.x
  • Prencipe, A., Markarian, G., & Pozza, L. (2008). Earnings management in family firms: Evidence from R&D cost capitalization in Italy. Family Business Review, 21, 71–88. doi: 10.1111/j.1741-6248.2007.00112.x
  • Rogers, J. L., & Stocken, P. C. (2005). Credibility of management forecasts. Accounting Review, 80, 1233–1260. doi: 10.2308/accr.2005.80.4.1233
  • Ronen, J., & Sadan, S. (1981). Smoothing income numbers: Objectives and implications. Reading, MA: Addison-Wesley.
  • Salvato, C., & Moores, K. (2010). Research on accounting in family firms: Past accomplishments and future challenges. Family Business Review, 23, 193–215. doi: 10.1177/0894486510375069
  • Skinner, D. J. (1994). Why firms voluntarily disclose bad news. Journal of Accounting Research, 32, 38–60. doi: 10.2307/2491386
  • Skinner, D. J., & Sloan, R. G. (2002). Earnings surprises, growth expectations, and stock returns or don't let an earnings Torpedo sink your portfolio. Review of Accounting Studies, 7, 289–312. doi: 10.1023/A:1020294523516
  • Stavrou, E., Kassinis, G., & Filotheou, A. (2007). Downsizing and stakeholder orientation among the fortune 500: Does family ownership matter? Journal of Business Ethics, 72, 149–162. doi: 10.1007/s10551-006-9162-x
  • Stockmans, A., Lybaert, N., & Voordeckers, W. (2010). Socioemotional wealth and earnings management in private family firms. Family Business Review, 23, 280–294. doi: 10.1177/0894486510374457
  • Teoh, S. H., Ivo, W., & Wong, T. J. (1998a). Earnings management and the long-run market performance of initial public offerings. Journal of Finance, 53, 1935–1974. doi: 10.1111/0022-1082.00079
  • Teoh, S. H., Welch, I., & Wong, T. J. (1998b). Earnings management and the underperformance of seasoned equity offerings. Journal of Financial Economics, 50, 63–99. doi: 10.1016/S0304-405X(98)00032-4
  • Trueman, B., & Titman, S. (1988). An explanation for accounting income smoothing. Journal of Accounting Research, 26, 127–139. doi: 10.2307/2491184
  • Verrecchia, R. E. (2001). Essays on disclosure. Journal of Accounting & Economics, 32, 97–180. doi: 10.1016/S0165-4101(01)00025-8
  • Wagenhofer, A. (1990). Voluntary disclosure with a strategic opponent. Journal of Accounting & Economics, 12, 341–363. doi: 10.1016/0165-4101(90)90020-5
  • Wang, D. (2006). Founding family ownership and earnings quality. Journal of Accounting Research, 44, 619–656. doi: 10.1111/j.1475-679X.2006.00213.x
  • Ward, J. L. (1987). Keeping the family business healthy. San Francisco, CA: Jossey-Bass.
  • Watts, R. L., & Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. Accounting Review, 53, 112–134.
  • Wiseman, R. M., & Gomez-Mejia, L. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 23, 133–153.
  • Yang, M. L. (2010). The impact of controlling families and family CEOs on earnings management. Family Business Review, 23, 266–279. doi: 10.1177/0894486510374231
  • Zang, A. Y. (2012). Evidence on the trade-off between real activities manipulation and accrual-based earnings management. Accounting Review, 87, 675–703. doi: 10.2308/accr-10196
  • Zellweger, T., Nason, R., Nordqvist, M., & Brush, C. (2011). Why do family firms strive for nonfinancial performance? An organizational identity perspective. Entrepreneurship Theory and Practice, 37, 229–248.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.