Abstract

The motivation for this review paper comes from the growing interest of researchers in governance mechanisms in emerging markets where family and concentrated ownership structures are ubiquitous. Specifically, in this review, we summarize and synthesize hypotheses and findings from different research studies to highlight how and why larger family ownership in a corporation engenders information asymmetry problems and how these problems affect minority shareholders. Towards the end of the review, we discuss some of the mechanisms that can be adopted by minority shareholders to reduce information asymmetry.

Key words: Information asymmetry, ownership structure, family business, agency costs, corporate disclosure policy, controlling shareholders.