Family companies and the costs of governance mechanisms: A discriminant analysis for a sample of Algerian companies

Mohamed Cherif BENZOUAI

doi:10.54960/jfcg.v2i1.18

Authors

Mohamed Cherif BENZOUAI Oum El Bouaghi University, Algeria.

DOI:

https://doi.org/10.54960/jfcg.v2i1.18

Keywords:

Family Companies Governance, Governance Costs, Discriminatory Analysis

Abstract

This paper aims at shedding light on the importance of corporate governance mechanisms costs when considering the decision of adoption of those mechanisms by companies, by relying on the discriminant analysis of a sample of 112 Algerian unlisted companies. The special nature of the agency problem in family companies allows it to adopt a different and lower cost governance structure than other companies. The study found that the variables that reflect corporate governance mechanisms have a significant effect in the discriminant function between the family companies and the rest of the companies.

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