Early adoption of non‐financial disclosure in family firms

This study investigates when the reputation enhancing signals of family firms include early adoption of non-financial disclosure. Drawing on signalling theory, we examine the effect of family ownership on the early adoption of non-financial disclosure and the moderating role of contingency signals: founder chief executive officer (CEO) leadership and employee degrowth rate. We test our hypotheses with panel regressions on a dataset of Italian listed family firms over the period 2013–2017, years before the introduction of mandatory non-financial reporting. The results reveal an inverted U-shaped relationship between family ownership and early adoption of non-financial disclosure, negatively moderated by the presence of a founder CEO and positively moderated by employee degrowth. We discuss the implications of our findings for theory and practice.