A Straw in The Wind: Media Opinion on the Family and Analyst Responses During Family Firm Succession

This study explores how business media opinion on family members affect analyst stock recommendations during family firms’ intergenerational successions. Through field interviews and data analyses on a sample of Chinese publicly listed family firms, we find evidence suggesting that analysts tend to view the process from a system perspective and employ contextually embedded and relational specific cognitive schemas when understanding the performance implications of family dynamics. Our results show that positive media opinion on successors can increase analyst recommendations, but such effects may be attenuated by favorable media opinion about founders. This founders’ shadow effect is less pronounced among father-daughter and founder-nonblood heirs than it is for father-son dyads. Moreover, favorable media opinion about successors siblings may increase analysts’ worry about sibling rivalry and thus leads to lower recommendations. We discussed the theoretical and practical implications of our study to the institutional logics, securities analysts, and family firm literature.