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The Value of Marriage to Family Firms

Published online by Cambridge University Press:  08 April 2013

Pramuan Bunkanwanicha ,
Joseph P. H. Fan  and
Yupana Wiwattanakantang
Pramuan Bunkanwanicha
Affiliation:
pbunkanwanicha@escpeurope.eu, ESCP Europe, 79 Avenue de la République 75011 Paris, France
Joseph P. H. Fan
Affiliation:
pjfan@cuhk.edu.hk, Chinese University of Hong Kong, Faculty of Business Administration, Shatin, NT, Hong Kong
Yupana Wiwattanakantang
Affiliation:
yupana@nus.edu.sg, National University of Singapore, Business School, Mochtar Riady Building, BIZ 1 2-7, 15 Kent Ridge Drive, Singapore 119245, Singapore.
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Abstract

This paper presents the first empirical evidence showing that the marriage of a member of the controlling family adds value to public corporations. The results, based on a uniquely comprehensive data set from Thailand, show that the family firm’s stock price increases when the partner is from either a prominent business or a political family. Abnormal returns tend to be higher for firms whose operation depends on extensive networks. In contrast, marriages to ordinary citizens are not associated with any abnormal returns. These findings are generally supportive of the value of networks in general and marriage in particular.

Type
Research Articles
Information
Journal of Financial and Quantitative Analysis , Volume 48 , Issue 2 , April 2013 , pp. 611 - 636
Copyright
Copyright © Michael G. Foster School of Business, University of Washington 2013 

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