Founding-Family Ownership and Firm Performance: Evidence from the S&P 500
We investigate the relation between founding-family ownership and firm performance. We find that family ownership is both prevalent and substantial; families are present in one-third of the S&P 500 and account for 18 percent of outstanding equity. Contrary to our conjecture, we find family firms perform better than nonfamily firms. Additional analysis reveals that the relation between family holdings and firm performance is nonlinear and that when family members serve as CEO, performance is better than with outside CEOs. Overall, our results are "inconsistent" with the hypothesis that minority shareholders are adversely affected by family ownership, suggesting that family ownership is an effective organizational structure. Copyright 2003 by the American Finance Association.
Year of publication: |
2003
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Authors: | Anderson, Ronald C. ; Reeb, David M. |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 58.2003, 3, p. 1301-1327
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Publisher: |
American Finance Association - AFA |
Saved in:
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