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Effects of family ownership and family management on the performance of entrepreneurial firms

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  • Reddy, Krishna
  • Wellalage, Nirosha Hewa

Abstract

Extending past research, this paper proposes that the quadratic inverse-U relationship between family ownership and the performance of entrepreneurial firms when moderated by the presence of family management and external blockholding. Specifically, it proposes that both factors exacerbate the decline in performance when the proportion of family ownership in entrepreneurial firms remains high. The proposed hypotheses are tested on ten years of panel data from a sample of European firms. Analysis of data supports the hypotheses. Implications for the theory and practice of entrepreneurial firms are discussed.

Suggested Citation

  • Reddy, Krishna & Wellalage, Nirosha Hewa, 2023. "Effects of family ownership and family management on the performance of entrepreneurial firms," Research in International Business and Finance, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:riibaf:v:65:y:2023:i:c:s0275531923001034
    DOI: 10.1016/j.ribaf.2023.101977
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    2. Fernandez, Viviana, 2023. "Family entrepreneurship around the world," International Review of Financial Analysis, Elsevier, vol. 89(C).

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    More about this item

    Keywords

    Entrepreneurial firms; Family ownership; Family management; Agency theory; Stewardship theory;
    All these keywords.

    JEL classification:

    • L - Industrial Organization
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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