Swedish family ownership and its influence on stock performance

Abstract

This study researches the association between Swedish family ownership and stock performance. Using the sample of non-financial firms listed in SSE (Stockholm stock exchange) in the time-period of 2010-2020, we find that Swedish family firms delivered an annual abnormal return of 1.82% to 3.23% when adjusting for firm characteristics. We also find that family firms delivered an abnormal return of 8.73% to 9.90% when adjusting for risk factors. We document that family firms experience a lowered valuation caused by perceived agency cost from the market while being more efficient than non-family firms. The result of this study suggests that an investor would earn a premium by investing in Swedish family firms.