Private Family Firms and Distribution of Control: Evidence from Norway

Abstract

Using a sample of 1 701 newly started Norwegian private family firms, where the CEO also is from the founding family, (family firms), in the period from 2000 through 2015, this thesis investigates the survivability, profitability and growth of these firms. Comparing the results of firms with a high concentration of control with firms with low concentration of control. I find that family firms have a higher survival rate the first 6 years of business than that of new firms where no family has more than 50% control (non-family firms). However, the probability of survival converges towards the same value over time. When investigating profitability, I find that family firms takes shorter to become profitable, but nonfamily firms will catch up and ultimately become more profitable. In terms of growth, I find strong evidence for non-family firms having higher and more rapid growth than family firms. There has been increasing demands for research on private family firms, and with this thesis I wish to supplement existing research and set the ground for further research on private family firms. My thesis provides evidence towards empirical research, proving owners of private family firms being less diversified and more risk averse than owners of non-family firms.