Influence of Family Involvement in Management and Ownership on Firm Performance: Evidence From Poland

Abstract

This article investigates the influence of family involvement on firm performance in an emerging market economy. Using a panel of 217 Polish companies from 1997 to 2005, the authors find an inverted U-shaped relationship between the share of family ownership and firm performance. The data also reveal that firms with family CEOs are likely to outperform their counterparts that have nonfamily CEOs. The results take into account the endogeneity of family ownership and are robust to a number of specification checks.

Family-Owned Firms between Agency Conflicts and Stewardship: Corporate Governance Factors Driving Firm Performance

“…As we find that a Family CEO has a positive effect on firm performance measured by ROA and ROE (H2 supported), we fall in line with Adams et al (2009), Anderson andReeb (2003), Barontini and Caprio (2006), Hansson, Liljeblom andMartikainen (2009), andKowalewski, Talavera andStetsyuk (2010), but contradict Bennedsen et al (2007). Relating to agency theory, we suppose that when ownership and management reside within a family, agency costs are at least low.…”

“…We also find such a positive effect on ROE (H1 supported for ROE). Thus, we disagree with Anderson and Reeb (2003), Barontini and Caprio (2006), Kowalewski, Talavera and Stetsyuk (2010), Maury (2006), and Schulze, Lubatkin and Dino (2003), who claim that the objectives of the owner and the firm are aligned in family-owned firms. Based on our results , we assume that family-owned firms possess distinct resources such as the social capital and stewardship behavior stemming from common ancestry and shared family identity (Corbetta & Salvato, 2004), also supporting basic stewardship theory (Davis et al, 1997;Donaldson & Davis, 1991).…”

The Activity of Family Businesses and the Phenomenon of Underpricing of Their Shares in IPOs in Poland in the Years 2013–2015

“…It was assumed that a family firm was one where members of one family owned more than 25% of the shares in the company. A similar approach can be found in other works regarding the Polish market (Kowalewski, Talavera and Stetsyuk, 2010); for foreign markets, other values are accepted, e.g., 20% (La Porta, Lopez-deSilanes and Shleifer, 1999) or 33% (Barth, Gulbrandsen and Schone, 2005). It is worth mentioning that among the surveyed companies, which were considered as family businesses according to the criterion of ownership, the vast majority of family members also sat on the company management board.…”

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

“…Numerous researches have focused on the relationship between family ownership and performance. Nevertheless, even if family firms' outperformance seems to predominate in the literature (Charreaux, 1991;Coleman & Carsky, 1999;Anderson & Reeb, 2003;Andres, 2008;Bughin & Colot, 2008;Ahmad & Amran, 2010), neutral (Chrisman et al, 2004;Jaskiewics et al, 2006;Rutherford et al, 2008) and negative (Yurtoglu, 2000;Barth et al, 2005;Klein et al, 2005;Giovannini, 2010;Kowalewski et al, 2010) effects of family ownership on performance are also noticed.…”