Family Involvement in Ownership and Management: Exploring Nonlinear Effects on Performance (original) (raw)
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FAMILY INVOLVEMENT IN MANAGEMENT AND FIRM PERFORMANCE: EVIDENCE FROM ITALY
2011
Using Total Factor Productivity (TFP) as a measure of corporate performance, this study compares the performance of owner management to that of firms run by professional managers over the period 2004-2006. We consider the influence of owner management for the sample as a whole and for subgroups of firms. The findings demonstrate that family run firms are less productive than
2009
Research on the profitability of family firms is growing, but results are mixed, especially for small unlisted companies. We argue this is due to the co-presence of benefits and disadvantages of both family ownership (FO) and family involvement (FI). Thus, we build upon two complementary theoretical perspectives -the stewardship and the stagnation perspectives -to explore the presence of non-linear effects of these two variables on profitability. We run regression analyses on longitudinal data drawn from 294 small privately-held family firms in Italy. We measure FI by the involvement of the family in management, the involvement of the family in the board of directors and the number of generations involved. Our results grasp the complexity of the effects of FO and FI in small unquoted companies: we find an inverted U-shaped relationship between FO and ROA, a positive relationship between family involvement in management and ROE, and a negative relationship between the number of generations involved and ROE.
International Journal of Academic Research in Accounting, Finance and Management Sciences
Small firms that are managed or controlled by founding families, hereafter, referred to as family firms, constitute an important source of the economic system in Italy. We found family firms are more likely to outperform non-family firm. After controlling for firm specific variables, we find a positive association between family ownership and firm; while the management by family members seems not to impact on corporate performance. This research demonstrates the correlation between the family firms and the performance depends greatly on the type of family business, as well as the influence that the founding family exercises, through ownership and/or management.
Asian Social Science, 2014
This study aims to provide an empirical evidence on the moderating effect of family involvement in management (family CEO and founder CEO) on the relationship between family ownership and firm's performance. From a sample of 75 public listed companies (375 firm-year observations) in Saudi Arabia, we use a five-year interval (2007)(2008)(2009)(2010)(2011) and two firm performance indicators (market to book value (MBV) and return on assets (ROA)) to test five hypotheses. The hypotheses that there is a direct impact of family ownership and founder CEO on ROA and MBV were supported respectively. The hypothetical moderating impact of family CEO and founder CEO have been partially confirmed with MBV. Overall, the findings highlight the importance of occupying CEO positions in family firms by family members, especially the founders for gaining better performance. However, the results are robust when only family firms are examined separately.
Sinergie Italian Journal of Management, 2018
Purpose of the paper: to assess the impact of family involvement on performance, failure probability and acquisitions. Methodology: empirical analysis on a sample of 141 companies listed on the Milan Stock Exchange (2005-2011). To identify family firms, we defined some criteria that consider family presence both in ownership and in management. We also defined a synthetic measure of family involvement for family firms. In order to test our hypothesis we ran correlation tests, tests for proportion and we estimated linear regression models. Findings: family control in ownership is not statistically related to performance, risk and acquisitions. On the other hand, the presence of family controlled management influences some performance indicators and acquisition value but not the company's risk of failure. Limitations: we did not assess the role of family succession. Also, we evaluated the degree of familiness only at the beginning (2006) and the end (2011) of the period of analysis. Originality of the paper: we investigated how family ownership and management affected the measurement of the family involvement indicator during the observed period. Our study also helps investigate the relationships between familiness key variables (ownership and management) and performance, propensity for acquisitions and probability of failure. Practical implications: family firms with a lower level of family involvement in the management dimension are characterized by a greater acquisition propensity. This may be a consequence of the fact that family managers manifest a higher risk aversion, preferring to ensure the company's survival rather than implement external growth strategies.
Family Ownership and Corporate Performance
Jurnal Akuntansi dan Pajak
The paper aims to investigate whether family ownership as controlling shareholder effect on firm performance. This paper uses ultimate (direct and indirect) ownership to identify a listed firm owned by family or non-family. Family ownership is majority shareholder for listed companies in Indonesia. Family ownership will be good impact (competitive advantage) or bad impact (private benefit) on companies. The study also motivates to study this topic because investigating on family ownership as controlling shareholder is limited in Indonesia. The study uses panel data or pooled data. The method for collecting data is archival. Unit of analysis of the study is organization. Sample of this study is 604 observations during 2001-2007. This study uses purposive sampling to collect data from the Indonesian Stock Exchange. This study collects and searches ultimate ownership on chain of ownership structure in manufacturing companies listed in the Indonesian Stock Exchange. This study uses ulti...
The why and how of managerialization of family businesses: evidences from Italy
2015
This paper concerns how management processes adopted by family firms are influenced by family’s and organizational characteristics; more specifically we would like to contribute to the debate on the managerialization of family firms, by studying the determinants of the adoption of managerial systems. We consider managerialization of family business related to the diffusion of formal managerial mechanisms, both strategic planning and managerial control systems, and human resource management systems. We distinguish between determinants of managerialization related the family’s characteristics, such as involvement of family/non family managers, and organizational drivers. Differently from previous studies, we articulated family involvement in management, considering separately the involvement of family members in the top management team, in the techno-structure, and in the middle management. The research hypotheses have been tested on a sample of 99 family firms from the Novara provinc...