Family ownership and firm performance: Influence of family management, family control, and firm size

Abstract

This study examines the relationship between family ownership and firm performance by considering the influence of family management, family control, and firm size. Using proxy data of 786 public family firms in Taiwan during 2002-2007, this study found that family ownership is positively associated with firm performance. The positive association is strong particularly when family members serve as CEOs, top managers, chairpersons, or directors of the firms; however, the association becomes weak when family members are not involved in firm management or control. The findings suggest that the potential family-ownership effects are more likely to be realized when family ownership is combined with active family management and control. In addition, the association between family ownership and firm performance is stronger in small-and medium-sized enterprises (SMEs) than in large companies.

Family business goals, corporate citizenship behaviour and firm performance: disentangling the connections

“…Stewardship behaviour (Eddleston and Kellermanns, 2007;Eddleston, Kellermanns and Zellweger, 2012) is entirely consistent and supportive of corporate citizenship behaviour. Particularly with the family modelling citizenship behaviour at the top, it can be logically argued that this will support stewardship and corporate citizenship behaviour in the rest of the firm (Chu, 2011). Furthermore, family businesses have been reported to be concerned with long-term survival and such a long-term orientation produces multiple attitudes and behaviours (futurity, continuity, persistence, intertemporal choice and self-control to name a few) consistent with corporate citizenship behaviour (Lumpkin, Brigham and Moss, 2010).…”

Banking Relationships, Managerial Ownership and Operational Performance: A Simultaneous Equations Approach in the Context of SMEs

“…Furthermore, in small businesses controlled by their owners, profitability is not a strong enough incentive for management to participate in the company's capital (Stewart et al, 2001). Schulze et al (2001) and Chu (2011) suggest that the agency costs incurred by small businesses are related to the altruistic feelings of the owners as family management, constituting a strong incentive to promote and sustain family ties. Our results are in line with those obtained by Schulze et al (2001) and Steier (2003); however, they contradict those reported by Littuen (2000) and Chung and Chan (2012) who found performance had a positive effect on managerial ownership.…”

How Do Private Family Firms Face the Crisis? Empirical Evidence from Belgium

“…The models are built by using Generalised Least Squares (GLS) and Ordinary Least Squares (OLS) regressions. By referring to the literature in this area (Anderson & Reeb, 2003;Maury, 2006;Chu, 2009), our first equation measures the effect of family ownership on performance and is formulated as follows: Pieper et al, (2008) and Villalonga and Amit (2006), the age for each company is defined as the natural logarithm of the number of years since its creation. Debts i,t is a variable to control for the effect of capital structure on performance.…”