Going private: A socioemotional wealth perspective on why family controlled companies decide to leave the stock-exchange
2017 (English) In: The Journal of Family Business Strategy, ISSN 1877-8585, E-ISSN 1877-8593, Vol. 8, no 2, p. 74-86Article in journal (Refereed) Published
Abstract [en]
Our purpose is to understand the process of ‘going private’ decisions in family firms by applying a socioemotional wealth (SEW) perspective, specified in the following research questions: how do socioemotional wealth considerations influence owning families’ decisions to delist their publicly-listed companies? How do socioemotional wealth considerations change after the delisting of a firm? Based on case studies of two family firms, we elaborate upon the balancing of socioemotional and financial wealth considerations by the family owners, the assessment of which changes over time. Ultimately, we propose that the experiences from being listed can lead to the reevaluation of financial, as well as socioemotional, wealth considerations. By delisting, the companies reclaim independence and control, and the identity as a private family-owned firm becomes once again pronounced. We develop the SEW-perspective by viewing the decision to delist as a mixed gamble, in that owning families have to weigh personal and financial losses against SEW gains, thereby indicating how SEW-considerations change over time. We find that owning families are willing to sacrifice current SEW, accepting current financial losses for prospective increased SEW. Additionally, in this study we extend the argument that decisions to leave the stock market are tradeoffs between competing factors.
Place, publisher, year, edition, pages Elsevier, 2017. Vol. 8, no 2, p. 74-86
Keywords [en]
Socioemotional wealth, Family business, Mixed gamble, Going private, Family ownership, Case study
National Category
Business Administration
Research subject Humanities and Social sciences
Identifiers URN: urn:nbn:se:hj:diva-35402 DOI: 10.1016/j.jfbs.2017.01.005 ISI: 000417670900002 Scopus ID: 2-s2.0-85017464265 OAI: oai:DiVA.org:hj-35402 DiVA, id: diva2:1090034
Conference European-Academy-of-Management Conference, Atlanta, GA, AUG 04-08, 2017
2017-04-212017-04-212025-10-13 Bibliographically approved