How Do Family Ownership, Control, and Management Affect Firm Value?

Villalonga, Belén; Amit, Raphael

doi:10.2139/ssrn.556032

Cited by 812 publications

(1,476 citation statements)

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“…Consequently, these initial results were extended to different markets and analysed in more refined ways. Villalonga and Amit (2006) in a study on Fortune 500 companies extend Anderson and Reeb's analysis and find different results.…”

Section: Family Firms and Performancementioning

confidence: 79%

“…Following extant literature on family firms and blockholders, a company is defined as being widely held if no shareholder holds more than 20% of ultimate voting rights (see among others Villalonga and Amit (2006), Sraer and Thesmar (2007)). Although a threshold of 20% may seem low, there exists a widely accepted view that due to generally low annual meeting attendance and active representation of blockholders either as chairman of the board or CEO in many companies, it is sufficient for having an influence on company policies and management.…”

Section: Ownership Variablesmentioning

confidence: 99%

“…Several studies have shown that family firm characteristics, and here especially the active involvement of a family member, or generational issues may have an important impact on firm performance 11 and policy (e.g. Pérez-González (2006), Villalonga and Amit (2006) or Bennedsen et al (2007)). Considering these findings, founding family firms have further been categorised into groups depending on the active position and generation of a family member.…”

Section: Ownership Variablesmentioning

confidence: 99%

See 2 more Smart Citations

Are Founding Families Special Blockholders? - An Investigation of Controlling Shareholder Influence on Firm Performance

Isakov

Weisskopf²

2012

SSRN Journal

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This paper examines how family and non-family ownership affects the performance of Swiss listed firms from 2003 to 2010. We distinguish between these two types of controlling shareholders since they have different objectives. We hypothesise that only family shareholders have a real incentive to reduce agency costs whereas non-family blockholders are similar to widely held companies. Our results show that family firms are more profitable and sometimes display better market valuations as opposed to companies that are widely held or have a non-family blockholder. We investigate the impact of different features of family firms on performance, and document that the generation of the family, active involvement of the family and contestability of family control play an important role.JEL Classification: G3; G32

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Section: Family Firms and Performancementioning

confidence: 79%

Section: Ownership Variablesmentioning

confidence: 99%

Section: Ownership Variablesmentioning

confidence: 99%

See 1 more Smart Citation

Are Founding Families Special Blockholders? - An Investigation of Controlling Shareholder Influence on Firm Performance

Isakov

Weisskopf²

2012

SSRN Journal

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“…Bloom and Van Reenen (2006) found that mismanagement will occur in particular if a business is transferred to the eldest son (primogeniture), whereas the management abilities will not be affected if the entire family appoints the management of a transferred business. In contrast, Morck, Shleifer, and Vishny (1989), Bennedsen, Nielsen, Pérez-González and Wolfenzon (2007), Pérez-González (2006) and Villalonga and Amit (2006) discovered in general a significantly poorer performance of companies run by heirs compared to firms with non-family executives. Grossmann and Strulik (2010) disapproved an inheritance tax privilege for businesses in a general equilibrium model.…”

Section: Pros and Cons For An Inheritance Tax Privilege For Businessesmentioning

confidence: 74%

Endangering of Businesses by the German Inheritance Tax? — An Empirical Analysis

Houben

Maiterth

2011

Bus Res

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This contribution addresses the substantial tax privilege for businesses introduced by the German Inheritance Tax Act 2009. Advocates of the vast or even entire tax exemption for businesses stress the potential damage of the inheritance tax on businesses, as those often lack liquidity to meet tax liability. This submission tackles this issue empirically based on data of the German Inheritance Tax Statistics and the SOEP. The results indicate that former German inheritance tax law has not endangered transferred businesses. Hence, there is no need for the tremendous tax privilege for businesses in current German inheritance tax law. An alternative flat inheritance tax without tax privileges, which meets revenue neutrality per tax class according to current tax law, provokes in some cases relative high tax loads which might trouble businesses.

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“…See Villalonga and Amit (2006), Morck et al, (2000); Bennedsen et al (2007), Adams et al (2008), Perez-Gonales (2006). complementary to that of Michelacci and Schivardi (2008) and of Barba Navaretti et al (2008), who offer some evidence of the negative reactions of family firms to idiosyncratic risk.…”

mentioning

confidence: 99%