Mixing family with business: A study of Thai business groups and the families behind them
AbstractHow does the structure of the families behind business groups affect the group's organization, governance, and performance? We construct a unique dataset of family trees and business groups for 93 of the largest business families in Thailand. We find a strong positive association between family size and family involvement in the ownership and control of the family businesses. The founders' sons play a central role in both ownership and board membership, especially when the founder of the group is dead. Greater involvement by sons is also associated with lower firm-level performance, especially when the founder is dead. One hypothesis that emerges from our analysis is that part of the decay of family-run groups over time is due to the dilution of ownership and control across a set of equally powerful descendants of the founder, which creates a "race to the bottom" in tunneling resources out of the group firms.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Economics.
Volume (Year): 88 (2008)
Issue (Month): 3 (June)
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Web page: http://www.elsevier.com/locate/inca/505576
Other versions of this item:
- Marianne Bertrand & Simon Johnson & Krislert Samphantharak & Antoinette Schoar, 2008. "Mixing Family With Business: A Study of Thai Business Groups and the Families Behind Them," NBER Working Papers 13738, National Bureau of Economic Research, Inc.
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- Z19 - Other Special Topics - - Cultural Economics - - - Other
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