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An agency theoretic analysis of value creation through management buy-outs of family firms

Chrisman, James J. and Chua, Jess H. and Steier, Lloyd P. and Wright, Mike and Mckee, D’lisa N. (2012) An agency theoretic analysis of value creation through management buy-outs of family firms. Journal of Family Business Strategy, 3 (4). pp. 197-206. ISSN 1877-8585

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Abstract

Family firms without able and willing family successors are frequently sold to non-family managers through management buy-outs (MBOs). Whether MBOs create value is thought to be dependent upon the ability to reduce owner–manager agency costs. In this article we examine the agency costs of MBOs that acquire family firms. We contribute to theory by arguing that in such situations, value creation by reducing agency costs will depend upon pre-MBO agency costs, the ability to solve the double agency problem, and the relationship between the cost of agency control mechanisms and the residual losses from opportunism before and after the MBO.

Item Type: Article
Journal or Publication Title: Journal of Family Business Strategy
Subjects:
Departments: Lancaster University Management School > Institute for Enterprise & Entrepeneurial Development (IEED)
ID Code: 64519
Deposited By: ep_importer_pure
Deposited On: 16 May 2013 10:12
Refereed?: Yes
Published?: Published
Last Modified: 24 Nov 2017 05:16
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/64519

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