The conventional wisdom is that dynastic control provides sharp incentives to entrepreneurs ex-ante, when founders run firms in anticipation of their progeny being in charge once they retire, and bad management ex-post, when untalented heirs take over. Using data on Swedish private firms and the...

I ask whether family firms provide stability to their stakeholders at the expense of growth. I build a model where aversion to external finance induces family-minded entrepreneurs to invest in smaller and less risky projects.Predictions are tested using an original panel of French firms. The...

I ask whether family firms provide stability to their stakeholders at the expense of growth. I build a model where aversion to external finance induces family-minded entrepreneurs to invest in smaller and less risky projects. Predictions are tested using an original panel of French firms. The...