Do Family Firms Provide More or Less Voluntary Disclosure?


  • We thank Joy Begley, Jan Bouwens, Bob Bowen, Sandra Chamberlain, Frank Hodge, Amy Hutton, Peter Joos, Bin Ke, Kin Lo, Dawn Matsumoto, Greg Miller, Maarten Pronk, Shiva Rajgopal, Steve Sefcik, Terry Shevlin, Susan Shu, Dechun Wang, Peter Wilson, T. J. Wong, Valentina Zomora; workshop participants at Arizona State University, Boston College, Chinese University of Hong Kong, Tilburg University (the Netherlands), University of Alberta, University of British Columbia, and University of Washington; and conference participants at the 2007 AAA annual meeting for helpful comments. We also thank Doug Skinner (editor) and an anonymous reviewer for their insightful suggestions. Professor Shuping Chen thanks the UW Business School Faculty Development Fund, Accounting Development Fund, and 2006 CFO Forum Summer Fellowship for financial support. Professors Xia Chen and Qiang Cheng thank the Social Sciences and Humanities Research Council of Canada for financial support.


We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results.