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Founder as Steward or Agent? A Study of Founder Ownership and Firm Value


Founder as Steward or Agent? A Study of Founder Ownership and Firm Value

Dawson, Alexandra, Paeglis, Imants and Basu, Nilanjan (2017) Founder as Steward or Agent? A Study of Founder Ownership and Firm Value. Entrepreneurship Theory and Practice . ISSN 1540-6520

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Official URL: https://doi.org/10.1177/1042258717725522


This study addresses the relationship between founder ownership and firm value in young and entrepreneurial businesses. We argue that a stewardship effect prevails when founders have low or high levels of ownership whilst an agency effect prevails at intermediate levels. Using a dataset of 1,269 firms with 11,645 firm–year observations, we find support for our hypothesis that there is a convex relationship between founder ownership and firm value. The agency effect at intermediate founder ownership is consistent with evidence indicating that these firms display lower leverage, greater unrelated diversification, and higher disproportionate board representation.

Divisions:Concordia University > John Molson School of Business > Finance
Concordia University > John Molson School of Business > Management
Item Type:Article
Authors:Dawson, Alexandra and Paeglis, Imants and Basu, Nilanjan
Journal or Publication:Entrepreneurship Theory and Practice
Date:26 September 2017
  • Social Sciences and Humanities Research Council of Canada (SSHRC)
  • Desjardins Centre for Innovation in Business Finance
  • Institut de Finance Mathematique de Montreal (IFM2)
Digital Object Identifier (DOI):10.1177/1042258717725522
ID Code:984433
Deposited On:20 Sep 2018 20:43
Last Modified:21 Sep 2018 15:48


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