The effect of family business on firm performance

Abstract

This paper investigates whether family ownership and the degree of involvement from the shareholders influence firm performance, primarily looking at family firms. Family firms are unique in their low amount of owners and the frequent interaction between the shareholders. They are driven by pride and honor of the family name contrarily to non-family firms. We are using data of accounting and governance information gathered by the Center of corporate governance research (CCGR) from 2000-2017. Within our definition of family firm we find that family firms produce weaker results than non-family firms, but if the family shareholders are involved in the company by either chair or CEO, or if the founder of the firm still is the CEO, then they do perform better than non-family firms.