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

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  • 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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Bibliographic Info

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
Date of revision:
Handle: RePEc:eti:dpaper:08026

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  1. Radice, H K, 1971. "Control Type, Profitability and Growth in Large Firms: an Empirical Study," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 81(323), pages 547-62, September.
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  3. Nick Bloom & John Van Reenen, 2006. "Measuring and Explaining Management Practices Across Firms and Countries," NBER Working Papers 12216, National Bureau of Economic Research, Inc.
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  7. Jensen, M.C. & Wamer, J.B., 1988. "The Distribution Of Power Among Corporate Managers, Shareholders, And Directors," Papers, Rochester, Business - Managerial Economics Research Center 88-06, Rochester, Business - Managerial Economics Research Center.
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  9. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, Elsevier, vol. 27(2), pages 595-612, October.
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  11. Cho, Myeong-Hyeon, 1998. "Ownership structure, investment, and the corporate value: an empirical analysis," Journal of Financial Economics, Elsevier, Elsevier, vol. 47(1), pages 103-121, January.
  12. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, Elsevier, vol. 80(2), pages 385-417, May.
  13. Bagnani, Elizabeth Strock, et al, 1994. " Managers, Owners, and the Pricing of Risky Debt: An Empirical Analysis," Journal of Finance, American Finance Association, American Finance Association, vol. 49(2), pages 453-77, June.
  14. 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, Elsevier, vol. 13(5), pages 829-858, December.
  15. Marianne Bertrand & Antoinette Schoar, 2006. "The Role of Family in Family Firms," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 73-96, Spring.
  16. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, Elsevier, vol. 20(1-2), pages 293-315, January.
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Cited by:
  1. MORIKAWA Masayuki, 2013. "Business Restructuring of Japanese Firms: Structural changes during the "Lost Decades"," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 13083, Research Institute of Economy, Trade and Industry (RIETI).

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