This paper distills three core value drivers common across the accepted valuation models and explores the application of these core valuation elements in a family firm context, drawing on the empirical evidence in the discipline. We adopt a Resource-Base View (RBV) of the competitive advantage of family firms and show that the 'familiness' factor is largely manifested in the firm's intangible assets. However, extant accounting does not recognise these intangible assets in the book value of the firm nor the implication for the long run permanence of earnings and cash flows. Thus valuation models predicated on book value, earnings and cash flows as inputs are miss-specified and do not reflect the intrinsic value of family firms. Theoretical propositions are presented as a road map for future empirical research.
|Number of pages||39|
|Publication status||Published - 2010|
|Event||27th Asian-Pacific Conference on International Accounting Issues: Global Perspectives of Accounting Information in the 21st Century - Gold Coast, Australia|
Duration: 1 Nov 2015 → 4 Nov 2015
Conference number: 22nd
|Conference||27th Asian-Pacific Conference on International Accounting Issues|
|Period||1/11/15 → 4/11/15|