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This study analyzes the relationship between implementing a Family Constitution (Protocol) and future family business performance. We analyze a unique sample of 530 Spanish family businesses. Half of these firms received financial aid from the government to implement a Family Protocol during 2003-2013. The analysis reveals that family businesses that implemented a Family Constitution had significantly improved performance within 2 years after the implementation. The positive relationship between the implementation of a Family Constitution and future firm performance is stronger for firms that had a nonfamily CEO, had multiple family owners, or were controlled by later generations.

This study analyses family versus nonfamily firm returns under different legal environments when a merger and acquisition (M&A) is announced. The database includes 124 M&As of European-listed firms (15 countries), with acquired firms being worldwide public or private firms (23 countries), over the 2002 to 2004 period. The findings show that family ownership has a positive and significant influence on acquiring shareholder M&A valuation. However, a major shareholder ownership of 32% has a negative effect. The authors also observe that a weaker legal and institutional environment in the target country has a positive influence on acquiring shareholder valuation.

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