What question did this study set out to answer?

To examine how the dispersion of equity ownership among directors influences debt financing choices in private, family-managed firms during periods of economic expansion.

April 1, 2003Academy of Management JournalOpen Access

Exploring the Agency Consequences of Ownership Dispersion Among the Directors of Private Family Firms.

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Authors

WSWilliam S. SchulzeUniversity of Utah MLMichael LubatkinStephen F. Austin State University RDRichard N. DinoUniversity of Connecticut

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Implication

Field study uncovers a U-shaped relationship between director ownership dispersion and debt usage in private family firms during market growth, highlighting complex governance dynamics.

Key Points

To examine how the dispersion of equity ownership among directors influences debt financing choices in private, family-managed firms during periods of economic expansion.
Conducted an empirical field study of 1,464 private family-owned and managed firms (N=1,464).
Applied agency theory and behavioral economics to analyze debt levels relative to ownership distribution among board members.
Demonstrated a statistically significant U-shaped relationship between director ownership dispersion and debt usage during periods of market growth.
Showed that debt usage is highest when ownership is either highly concentrated or broadly dispersed, and lowest at moderate levels of dispersion.

Cite This Study

Schulze et al. (2003) studied this question.

synapsesocial.com/papers/6a10faa85e6663f9d264c6cc https://doi.org/10.2307/30040613

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Implication

Field study uncovers a U-shaped relationship between director ownership dispersion and debt usage in private family firms during market growth, highlighting complex governance dynamics.

Exploring the Agency Consequences of Ownership Dispersion Among the Directors of Private Family Firms.

Discussion

Member takes

Implication

Key Points

Cite This Study

Exploring the Agency Consequences of Ownership Dispersion Among the Directors of Private Family Firms.

Discussion

Member takes

Implication

Key Points

Cite This Study

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