Ownership versus Management Effects on Performance in Family and Founder Companies: A Bayesian Analysis
AbstractThere are ongoing debates in the literature concerning the performance of family firms: some studies find superior performance among these companies, others find negative or neutral per-formance effects. In this research we employ agency theory to argue that the effects of family ownership vs. family management will be quite different: the former is expected to contribute positively to performance, the latter is argued to erode performance. Previous studies, due to problems of omitted variables or multicollinearity have been unable to distinguish these effects. Using a Bayesian approach that avoids these problems, we find that whereas family and founder ownership are associated with superior performance, the results for family management and even founder management are far more ambiguous. Our results have implications regarding the own-ership and management of lone founder and family firms.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23526.
Date of creation: 21 Jun 2010
Date of revision:
Family firms; lone founder firms; performance; Bayesian analysis; agency theory;
Find related papers by JEL classification:
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- G3 - Financial Economics - - Corporate Finance and Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
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