Founder-CEOs and stock market performance in the Nordic region : an empirical study conducted on publicly listed companies in the Nordic region during the period from 2008 to 2020

Abstract

About nine per cent of the publicly listed companies in the Nordic region are managed by one of its founders. These companies are different from others in terms of firm valuation and to some extent, stock market performance. An equal-weighted portfolio containing only founder-CEO firms from the period from 2008 to 2020 has earned an abnormal return of 5.2% annually when controlled for its skewed sector-distribution. This portfolio performs significantly well during the generally challenging period from 2008-2013. These findings become somewhat mixed when looking at a value-weighted portfolio, and when controlling for a variety of equity characteristics, leaving a mixed conclusion for these firms’ stock market performance. Nonetheless, these firms have a higher firm valuation despite no systematic differences in investment levels.