The Impact of Family Control on the Performance and Financial Characteristics of Family Versus Nonfamily Businesses in Japan: A Matched-Pair Investigation

Abstract

Research on family businesses has undergone rapid development in the past two decades. Broadly speaking, such companies perform better than nonfamily businesses, as recent investigations in Japan support. To obtain a more precise result, this research has applied to the Japanese context a research methodology that has proven its worth in Western cases. On the basis of data covering the years 1998 and 2003, we found better performance among family businesses in Japan.

The relationship among family business, corporate governance and firm performance: Evidence from the Mexican stock exchange

“…The main challenge of family companies is to promote growth without calling into question the permanence of family control (Goffee, 1996). Such an approach is consistent with the theory of longer-term perspectives by family firms (Allouche et al, 2008). Therefore, we propose the following hypothesis:…”

“…However, a consensus definition may not represent a pertinent research goal because, by nature, family businesses are contingent on the institutional legal and cultural context, which differs from country to country (Allouche, Amann, Jaussaud, & Kurashina, 2008). Differences in institutional and cultural contexts suggest that it may be a mistake to assume that a generic definition of family firm will prevail across societies.…”

“…Therefore, a unique or universal definition of family business may be misleading, because it cannot take into account fundamental differences of various legal and institutional frameworks (Carney, 2005;Dyer, 2006). This question makes sense in the case of Mexico, where families play an essential role in defining the corporate governance practices, and the predominance of family corporate structure has been explained in terms of conflict theory, assuming a framework to protect inefficient property rights (Allouche et al, 2008;La Porta, Ló pez de Silanes, Shleifer, & Vishny, 2000) 2.1.1. The benefits of family ownership Based on Jensen and Meckling's (1976) study, Schulze et al (2001) argue about three reasons for family firms to reduce agency cost significantly.…”

“…Indebtedness reinforces financial risk (Nam, Ottoo, & Thornton, 2003) which correlates positively with the risks of bankruptcy and loss of control (Gilson, 1990). The aversion of family business to debt is all the stronger for current liabilities (Mishra & McConaughy, 1999) which are associated most strongly with the risk of loss of control (Allouche et al, 2008).…”

Return on capital in Spanish tourism businesses: A comparative analysis of family vs non-family businesses

“…Along these lines, prior empirical research has found positive (e.g. Allouche, Amann, Jaussaud, & Kurashina, 2008;Block, Jaskiewicz, & Miller, 2011;Chu, 2009;Lindow, Stubner, & Wulf, 2010;Miralles-Marcelo, Miralles-Quirós, & Lisboa, 2014;Wagner, Block, Miller, Schwens, & Xi, 2015), negative (Cucculelli & Micucci, 2008;Sacristán-Navarro, Gómez-Ansón, & Cabeza-García, 2011), insignificant (Chrisman, Chua, & Litz, 2004;Miller, Le Breton-Miller, Lester, & Cannella, 2007;Westhead & Howorth, 2006) and even quadratic (De Massis, Kotlar, Campopiano, & Cassia, 2013;Kowalewski, Talavera, & Stetsyuk, 2010;Poutziouris, Savva, & Hadjielias, 2015) relationships between family involvement in business and firm performance. Another stream of research investigates how the specific characteristics of family business affect firm performance, especially those related to ownership, governance structure, management and succession (Block et al, 2011;De Massis et al, 2013;Garcia-Castro and Aguilera, 2014;Mazzi, 2011;Miralles-Marcelo et al, 2014;Villalonga & Amit, 2006).…”