Family Business in Peru: Survival and Expansion under the Liberalization
AbstractIt is argued that joint stock companies would be transformed from family firms to managerial firms with their development in size and scope. Such managerial firms would have many small shareholders; hence the ownership and management of the firm would be separated. However, in many developing countries including Peru, family businesses, in which families control both ownership and management, still play an important role in the national economy. After the liberalization of economy, which started in Peru in the 1990s, the national market has become more competitive due to the increase in participation of foreign capitals. To secure competitiveness, it is indispensable for family businesses to obtain management resources such as financial, human and technological resources from outside of the families. In order to do so without losing the control over ownership and management, Peruvian family businesses have incorporated companies with distinct characteristics to the extent that they can secure the control over ownership and management inside of their group. While keeping exclusive control of companies in traditional sectors, they actively seek alliance with other families and foreign capitals in competitive sectors. The management of companies with different degrees of control allows them to survive in today's rapidly changing business environment.
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Bibliographic InfoPaper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 7.
Date of creation: Aug 2004
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 7. 2004.8
Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
Find related papers by JEL classification:
- M19 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Other
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-03 (All new papers)
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- Shimizu, Tatsuya, 2006. "Executive Managers in Peru's Family Businesses," IDE Discussion Papers 59, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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