Ronald C. Anderson (The Kogod School of Business at American University) David M. Reeb
Abstract
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.
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Volume (Year): 58 (2003) Issue (Month): 3 (06) Pages: 1301-1327 Download reference. The following formats are available: HTML
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Bennedsen, Morten & Nielsen, Kasper & Pérez-González, Francisco & Wolfenzon, Daniel, 2005.
"Inside the Family Firm,"
Working Papers
21-2005, Copenhagen Business School, Department of Economics.
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