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Productivity and Survival of Family Firms in Japan: An Analysis Using Firm-Level Microdata

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Author Info
MORIKAWA Masayuki
Abstract

This article, by using a unique dataset of a large number of Japanese firms, empirically investigates the relationship between the structure of shareholding and productivity, survival, and managerial objectives. The focus is on the distinct traits of family firms, which compose the majority of Japanese firms. According to the results, the managerial objectives and performance of family firms are qualitatively and quantitatively different from those of non-family firms. Specifically, 1) productivity growth of family firms are significantly slower than non-family firms, after controlling for firm size, firm age, and industry; 2) family firms' probability of survival is higher than that of non-family firms; and 3) even after controlling for the high propensity to survive, family firms' productivity growth is slower. As family firms' management objectives are different from non-family firms, these results cannot be interpreted normatively. However, it is desirable to expand ownership options by reducing barriers to going public or transferring ownership.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08026.

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Length: 18 pages
Date of creation: Jul 2008
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Handle: RePEc:eti:dpaper:08026

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  3. Jensen, M.C. & Wamer, J.B., 1988. "The Distribution Of Power Among Corporate Managers, Shareholders, And Directors," Papers 88-06, Rochester, Business - Managerial Economics Research Center.
    Other versions:
  4. Eric J. Bartelsman & Mark Doms, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September. [Downloadable!] (restricted)
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  5. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May. [Downloadable!] (restricted)
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  8. Bagnani, Elizabeth Strock, et al, 1994. " Managers, Owners, and the Pricing of Risky Debt: An Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 453-77, June. [Downloadable!] (restricted)
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  12. Miller, Danny & Le Breton-Miller, Isabelle & Lester, Richard H. & Cannella Jr., Albert A., 2007. "Are family firms really superior performers?," Journal of Corporate Finance, Elsevier, vol. 13(5), pages 829-858, December. [Downloadable!] (restricted)
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