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Title: Adoptive expectations: Rising sons in Japanese family firms
Authors: Mehrotra, V.
Morck, R.
Shim, J.
Wiwattanakantang, Y. 
Keywords: Adoptions
Corporate governance
Family business
Inherited ability
Issue Date: Jun-2013
Citation: Mehrotra, V., Morck, R., Shim, J., Wiwattanakantang, Y. (2013-06). Adoptive expectations: Rising sons in Japanese family firms. Journal of Financial Economics 108 (3) : 840-854. ScholarBank@NUS Repository.
Abstract: We find inherited family firms more important in postwar Japan than generally realized, and also performing well on average. Non-consanguineous heir-run firms outperform blood heirs' firms, and roughly match founder-run listed firms, while blood heirs surpass professional managers at running family firms. Further, succession events suggest that adopted heirs "cause" elevated performance. We suggest that heir-run firms do well because non-consanguineous heirs displace the least talented blood heirs, the non-consanguineous heir "job" motivates professional managers, and the threat of displacement encourages blood heirs' effort and human capital accumulation, mitigating the "Carnegie conjecture" that inherited wealth deadens talent. © 2013 Elsevier B.V.
Source Title: Journal of Financial Economics
ISSN: 0304405X
DOI: 10.1016/j.jfineco.2013.01.011
Appears in Collections:Staff Publications

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