Agency

First Draft: September 19th 2001
This Draft: June second 2002
Comments Welcome

AGENCY PROBLEMS IN LARGE
FAMILY BUSINESS GROUPS
Entrepreneurship: Theory and Practice, Summer 2003. Vol. 27, Iss. 4; pg. 367 382

Randall Morck* and Bernard Yeung**

*Stephen A. Jarislowsky Distinguished Professor of Finance, University of Alberta School of Business, Edmonton,
AB, Canada T6G 2R6. Tel: (780) 492-5683. telecommunicate: (780) 492-9924. E-mail: randall.morck@ualberta.ca. Research
Associate, field Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, MA 02138 U.S.A.
**Abraham Krasnoff Professor of foreign Business and Professor of Economics, Stern School of Business,
brisk York University, New York, NY 10012 U.S.A. Tel: (212) 998-0425. Fax: (212) 995-4221. E-mail:
byueng@stern.nyu.edu.
Keywords:
FAMILY FIRMS; CORPORATE GOVERNANCE; PYRAMIDS; CREATIVE expiry;
INNOVATION; ECONOMIC GROWTH
Address correspondence to Randall Morck, School of Business, University of Alberta, Edmonton, Alberta, Canada,
T6G 2R6. Tel: (780) 492-5683. Fax: (780) 492-9924. E-mail randall.morck@ualberta.



ca;
We are grateful for comments and suggestions by Jess Chua, Jaime Navarro, Lloyd Steier, and participants at the
Theories of Family endeavor: Establishing a Paradigm for the Field conference, hosted by the Center for
Entrepreneurship and Family endeavor at the University of Alberta Business School.

Executive Summary
Much discussion of integrated governance problems highlights managers failure to act
for shareholders in widely held firms. This discussion typically assumes that greater insider
ownership leads to better corporate governance. This is because managers who own larger
lawfulness blocks in their firms are less likely to take actions that burn the value of their shares.
This logic, taken a step further, suggests that agency problems cogency be minimized in narrowly
held firms, such as those controlled by families.
This framework is certainly...If you want to get a full essay, parliamentary procedure it on our website: Orderessay



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