Abstract

Drawing upon agency theory and the family business literature, we suggest that family ownership will have an inverted u-shaped relationship with the use of the entrenchment index (E-index) provisions in publicly-traded family firms in the US. We also suggest that family ownership will have an inverted u-shaped relationship with family’s involvement in management and/or board. Family’s involvement in management and/or board will then influence the entrenchment index usage negatively. Our longitudinal analyses of a sample of 386 S&P 500 firms support our hypotheses.

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