Seminar #14 – February 24, 2021

ABSTRACT – Prior study found a concave, inverted U shape pattern of performance along CEO tenure in U.S public firms. Guided by notions from the literature regarding unique characteristics of mentorship in family firms, this study investigates how family ownership influences the pattern of performance along CEO tenure. Using accounting earnings as a performance measure, we found that when we examine family-owned firms, the pattern of earnings along CEO tenure is less concave than in non-family firms. The results are more pronounced in family firms with multiple family members, than in family firms with a single family member. We find similar results when we adjust earnings for potential earnings management, suggesting that the difference in the pattern of earnings along CEO tenure in family firms versus non-family firms is not merely a result of financial reporting choices.