The value of shareholder rights in family firms: Global evidence from a death in the family

Research Question How does the protection of shareholder rights affect pricing family firms? Findings Investor reaction to a death in family, measured using abnormal stock returns, averages 0.58% and is significant. Investors perceive be value enhancing event with potential dilute control. The positive investor amplified countries periods weaker rights. Theoretical Implications External internal corporate governance mechanisms limit extent which majority shareholders can take actions that hurt firm value. As such, perceptions how faithfully their interests are protected depend on legal rules protect Policy pay attention regulatory environment country, as well when evaluating agency costs. Our research has important policy implications because we show better affects hence funding costs firms.