Stock price crash risk could be lower in family firms because the controlling family investors have a longer-term interest, hold greater decision rights and are better informed than investors in diffusely owned firms (alignment effect). However, the agency costs between family and nonfamily investors (entrenchment effect) could affect crash risk in two opposing ways. Non-controlling investor skepticism about insider entrenchment limits overvaluation and reduces the crash risk. In contrast, entrenched insiders could hide bad news to exploit private benefits, which could increase the crash risk. We show that family firms exhibit a lower crash risk than similar nonfamily firms after controlling for lower overvaluation, which is consistent with the better alignment effect. Moreover, we show that better governance further reduces the crash risk, which indicates that the substitutive relationship between strong governance and family ownership shown in countries with low investor protection rights does not carry over to the U.S. where investor protection rights are strong.

家族企业的股价崩盘风险可能会更低，因为与分散型企业的投资者相比，控股家族投资者具有更长的利益，拥有更大的决策权并且拥有更好的信息知悉（对齐效应）。但是，家庭和非家庭投资者之间的代理成本（拉动效应）可能以两种相反的方式影响崩溃风险。非控制性投资者对内部人入的怀疑限制了高估并降低了崩溃风险。相比之下，根深蒂固的内部人士可能会隐藏坏消息以利用私人利益，这可能会增加崩溃的风险。我们表明，在控制了较低的高估后，家族企业比类似的非家族企业具有更低的崩溃风险，这与更好的一致效应相一致。而且，我们表明，更好的治理可以进一步降低崩溃风险，