Family firms and financial analyst activity
Abstract
This paper examines the relationship between ownership structure, analyst coverage, and forecast error for the entire population of non-financial companies listed on the Swiss Exchange for the period 2003–2013. The results show a negative association between concentrated ownership and analyst coverage for both family firms and firms held by a nonfamily blockholder. Furthermore, analysts' forecasts are shown to be more accurate for family firms than for other firms, suggesting a better information environment within these companies. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.